Ireland’s domestic economy is expected to grow more strongly than previously forecast this year — despite stickier-than-expected core inflation, according to new projections from the Central Bank of Ireland.
(Bloomberg) — Ireland’s domestic economy is expected to grow more strongly than previously forecast this year — despite stickier-than-expected core inflation, according to new projections from the Central Bank of Ireland.
The 2023 growth forecast was lifted to 3.7% from an 3.1% in March, helped by a “gradual improvement” in households’ real income, an unwinding of pandemic-era savings and state investment.
“Growth in the domestic economy this year is expected to be slightly stronger than previously anticipated,” said Robert Kelly, director of economic and statistics at the Central Bank of Ireland.
“The tightening of monetary policy is beginning to feed through the economy and will contribute to dampening demand and economy-wide price pressures,” he said.
Read: Ireland’s Economy Contracts as Multinational Growth Hits a Bump
Among the other forecasts in the bank’s quarterly economic bulletin were:
- Core inflation of 4.9% in 2023, up from 3.5% in March
- Headline inflation of 5.3% in 2023, up from 5% previously
- Growth in gross domestic demand of 5.3% compared with 5.6% previously
- Average unemployment rate of 4%, down from 4.4% earlier
Slower employment growth and a pick-up in wage increases are expected as capacity constraints become more “binding,” according to the bank.
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