Ireland doubles 2021 economic growth forecast, budget plans unchanged
Reuters
Published Sep 30, 2021 07:52AM ET
Updated Sep 30, 2021 08:30AM ET
By Padraic Halpin
DUBLIN (Reuters) -Ireland on Thursday doubled its forecast for economic growth this year but will not increase its budget package for 2021 as it aims to get the public finances in "far safer" shape than previously expected, Finance Minister Paschal Donohoe said on Thursday.
Finance ministry chief economist John McCarthy said he would not read too much into forecast gross domestic product growth of 15.6% this year due to the ways multinationals can distort Irish GDP. He said he would instead focus on the expected 5.2% growth in modified domestic demand.
GDP jumped 21.6% year-on-year in the second quarter as Ireland emerged from one of Europe's strictest lockdown, while modified domestic demand - which strips out some of the ways multinationals can distort the data - grew by 15% over the same period.
The finance ministry also expects unemployment to be around one percentage point lower for each of the next three years, falling to 7.2% in 2022 and 5.3% in 2024.
Inflation is expected to peak above 4% in the final quarter of the year before falling back below 2% in the third quarter of 2022, the forecasts showed.
The government decided in July to narrow its budget deficit more gradually than planned in order to increase capital spending in particular on housing and climate change.
Donohoe said he would not use the better than expected growth to further increase the amount of money available for spending hikes and tax cuts in the Oct. 12 announcement of the budget for 2022.
Public Expenditure Minister Michael McGrath also said government departments are unlikely to spend the record 90.7 billion euros allocated for 2021, raising the prospect of a markedly narrower budget deficit than the 5.1% forecast in July.
Donohoe is due to update the deficit and debt forecasts at or ahead of the budget, taking account of spending and tax figures for September that are due to be published on Monday.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.