Latest ESRI Forecast Predicts Strong GNP Growth in 2015 and 2016

March 25, 2015

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Macroeconomics
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  • GNP expected to grow at approximately 4 per cent per annum in 2015
  • Initial forecasts for 2016 indicate that the economy will grow by at least 3.5 per cent
  • Unemployment forecast to fall to 9.7 per cent in 2015 and 8.4 per cent in 2016

Economic growth is expected to be strong in 2015 and 2016, with Ireland's Gross National Product (GNP) forecast to grow by approximately 4 per cent in each year, according to the latest analysis by researchers at the Economic and Social Research Institute (ESRI).
In the Quarterly Economic Commentary, Spring 2015, published today (Wednesday, 25 March 2015), the ESRI researchers predict a growth in GNP of 4.1 per cent in 2015 and of 3.5 per cent in 2016. Declines in unemployment are also forecast, with the headline rate envisaged to fall to 8.4 per cent in 2016.

Speaking about the report, QEC author David Duffy (ESRI) said “The strong recovery in economic activity looks set to continue into 2015 where we forecast both GNP and GDP to grow by approximately 4 per cent. The strong expected performance in 2015 comes after the Irish economy grew by over 5 per cent in 2014, with a significant portion of that growth due to increases in labour productivity. The increased level of activity in the economy should see unemployment rates falling by the end of 2015 to less than 10 per cent for the first time since 2008. In 2014 we also saw domestic sources of growth increase in relevance and we envisage continued strong contributions from investment, in particular, and consumption into 2015.”

QEC co-author, Kieran McQuinn (ESRI) continued “As this is our first Commentary of the year, we have also released our initial forecast for 2016. Given the expected significant increases in investment in 2015 and continued improvements in productivity, we expect the Irish economy to be quite near to its potential level by the end of 2015 which leads us to forecast a growth rate in GNP of 3.5 per cent in 2016.”

“If the assumptions underlying our expectations for growth prove to be correct, then the Budget deficit should decline to 2.3 per cent of GDP this year, with a further reduction to 0.3 per cent in 2016. This represents a significant improvement in the public finances particularly when compared with the sizeable deficits that incurred in 2010 and 2011.”