World to flag but Ireland steady - OECD

RTE News:

The OECD has predicted that the Irish economy will continue to grow steadily at a rate of around 5% a year.

In its latest twice-yearly economic survey, the organisation forecasts that gross domestic product will expand by 5.3% this year and 5% next year, boosted by rapid growth in domestic demand as incomes grow strongly.

The Paris-based think tank says inflation should remain muted, moving up to 2.7% next year from 2.5% this year, but it warns that increasing labour costs are affecting competitiveness.

It says further competition in utilities, retail and professional services would help to curb the risk of renewed wage and price inflation.

The OECD's World Economic Outlook says growth in major industrialised countries is set to flag this year, dragged down by continued sluggishness in the euro zone.

It predicted that growth in its 30 member nations would slip to 2.6% in 2005, after 3.4% in 2004, before edging up to 2.8% next year.

'The smooth scenario where the recovery was expected to spread more evenly across the OECD has not materialized,' chief economist Jean-Philippe Cotis said.

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