Friday, August 19, 2005

The Irish government expects economic growth of at least 5% in 2005


The Irish economy recorded economic solid growth in 2004 but prospects for 2005 will depend on maintaining competitiveness, the government said today.

The Department of Finance's Annual Review and Outlook, published today, shows that GNP grew by 4pc in 2004, while GDP growth was 4.5pc.

Employment growth was particularly robust at 3pc or over 54,000 new jobs, the highest number of jobs created since 2001. Unemployment remained low by international standards and fell to 4.4pc.

GNP is forecast to grow by 5pc in 2005 and GDP by 5.1pc, the Department of Finance said.

Speaking on behalf of the Government, Minister for Transport, Martin Cullen said the figures confirm that Ireland's strong economic fundamentals remain.

However, he said that historically high oil prices are being felt here and that the best way to deal with them is to maintain competitiveness. "That means that we must keep our price and wage inflation in line with our international peers and reinforces the need to continue with balanced and responsible polices in Government."

The review also shows that inflation continued to moderate in 2004. The Consumer Price Index fell to 2.2pc from 3.5pc in 2003.

In 2005, inflation is forecast to average 2.4pc in CPI terms. On a harmonised basis, Ireland's inflation rate is now running close to the euro area average following a number of years when we topped the euro area inflation league table.

For the year as a whole Ireland's HICP inflation rate is forecast to average 2.2 per cent, broadly in line with the euro area average.

Ireland's public finances also remained sound in 2004, according to the review. Even allowing for costs associated with the refund of nursing home charges, the Government expects its deficit to be no more than 1pc of GDP and exchequer borrowing requirement of not more than E2.7bn in 2005.

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