Quarterly Economic Commentary, Spring 2022

Given heightened global uncertainty surrounding the Russian invasion of Ukraine in February 2022, our forecast has been revised slightly downward from the Winter Commentary. Nevertheless, we still see domestic economic activity increasing in 2022 with GDP and modified domestic demand (MDD) growing by 6.2 and 5.0 per cent respectively. We anticipate continued improvements in the labour market, with unemployment set to be 6.3 per cent in the present year. The General Government Balance, which has benefitted from underlying growth and less than anticipated spending, is set to register positive growth for the first time since 2019. However, there are significant downside risks for the public finances owing to the geopolitical crisis and higher than anticipated inflation.