Govt raises growth estimate for 2012 to 0.9% of GDP

The Government has raised its growth estimate for the economy for this year, from 0.7% of GDP to 0.9%.

The upgrade is based on a better than anticipated performance in the third quarter.

However, it has reduced its forecast for growth for next year by 0.75% to 1.5%, due to a weakening of the economies of Ireland’s main export partners.

In the medium-term fiscal statement, the Department of Finance estimates that the budget deficit this year will come in at 8.3% of GDP, slightly below the target of 8.6% set in the budget and by the Troika.

However, this is dependent on the outcome of November's Exchequer returns.

The department says it sees no change to the broad budget consolidation plan outlined last year.

As a result the planned adjustment for the next Budget remains at €3.5 billion.

The department says the employment outlook remains poor, with job losses in the first half of this year worse than expected.

It now foresees continued high levels of unemployment into the middle of the decade.

However, it does foresee net job creation in the economy by the second half of next year.