Irish economic growth very strong and looks likely to be sustained
Data for the third quarter of 2006 show that the Irish economy is continuing to deliver extremely strong economic growth. The details of CSO figures issued on Dec 21, also suggest that economic prospects may be somewhat brighter than some commentators have suggested.
Growth in the third quarter was boosted by a strengthening in exports with manufacturing output recovering and services exports surging. While household spending and house building remained solid, these numbers suggest strong economic growth is not entirely the product of a debt-fuelled binge on property and consumer goods.
In the third quarter of 2006, real GDP was 7.4 per cent higher than a year earlier while real GNP increased by some 5.4 per cent. These quarterly data can be quite volatile, and it appears that the numbers for the third quarter were flattered by timing issues relating to imports and exports. If today’s figures exaggerate the numerical strength of the Irish economy in the third quarter somewhat, the broad message of exceptionally healthy economic conditions is consistent with that emerging from recent employment and tax revenue data. We now look for GDP to increase by just under 6 per cent in 2006 with GNP set to increase by around 6.5 per cent. Reflecting the carryover of stronger end year conditions, we have raised our forecasts for 2007 by a half percentage point and now expect both GDP and GNP growth of 5.5 per cent next year.
Strong growth in third quarter of 2006
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