The Dáil is due to debate the Department of Finance outlook for the economy - known as the Stability programme Update - later today. The document will be sent to the European Commission, as per European rules later this week. It coincides with an outlook on the economy from Friend's First authored by the economist, Jim Power. Both the Department of Finance and Friends First are in agreement on the outlook, predicting GDP growth of between 4.5 and 5% this year.
"Based on data for the first four months, it's clear that momentum is continuing in 2016. 4.5 to 5% growth looks achievable, barring an external disaster." All the domestic indicators are still moving in right direction. It does set a positive economic backdrop for any government that might be formed in the coming days," Jim Power said.
Mr Power said the outlook was contingent on things going in our favour economically. "There are always risks out there globally but the risks are more intense at the moment. We're not out of the crisis of 2008. It has just morphed into its latest iteration which is focusing on China and emerging economies. That has has a massive impact on global market psychology," he said.
He also says that another more immediate issue is 'Brexit'. "The biggest short term risk is the impact on sterling, which is being driven by opinion polls at the moment. Since last November, sterling has been taking a hit and lost 15% against the euro. We saw it go up yesterday on the poll pointing to a yes vote." The economist said there were two areas where the threat of a British exit from the EU would seriously impact. "Our indigenous exports are still heavily dependent on UK. Last year, the UK accounted for over 40% of food and beverage exports. The second way it impacts is tourism. We have been doing very well from the US and UK, which was heavily driven by currency moves. With sterling moving, it makes Ireland a less attractive option," he explained.
Mr Power said the biggest domestic risk factor at the moment was the ongoing government formation talks. "Consumer confidence showed a significant decline in March. People have become disillusioned in relation to what's happening politically. If it drags on, it will lean more heavily on consumers and they'll become more cautious," he concluded.
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MORNING BRIEFS - Dalata Hotel Group has said it is seeing an encouraging start to 2016 after what it described as a "transformative year of growth and development" last year. In a statement issued ahead of its AGM in Dublin today, the company said its main markets are performing ahead of expectations.
*** Dairy and nutritionals group Glanbia has reported total group revenue down 2.5% for the three months to April 2nd - or 3.3% when the strong US dollar is accounted for. That was mainly down to declines in the Global Ingredients sector where the falling milk price has been taking its toll. But the company's Global Performance Nutrition division performed particularly well. Glanbia is maintaining its 2016 guidance of 8-10% growth in earnings per share.
*** Kerry Group has reaffirmed its earnings guidance of 6 - 10% growth for the full year. It reported 2.9% growth in business volumes for the first trading quarter. Both Kerry and Glanbia have their annual general meetings today.
*** Builders materials group CRH has reported group sales up 9% for the first quarter of 2016. It was driven by positive momentum in the American market where sales were up by over a fifth. In Europe, stability is bedding in but with regional variations. CRH is expecting first half earnings to come in close to €1 billion, representing mid-single digit percentage growth compared the first half last year.
*** Apple reported its first revenue decline in 13 years last night which saw its share price fall by 8% after hours on Wall Street. The iPhone maker recorded a 13% drop in its second quarter revenue as sales of its key product fell. It sold 51.2 million iPhones during the quarter, down 10 million exactly on the same quarter of 2015. China was a particular weak spot where sales there were down by a quarter.
*** US traders also greeted results from Twitter with a big share sell off. The share price was down over 13% after hours following a set of results that fell short of expectations. Monthly user numbers came in at 310 million - that was up by 5 million - but the social network had lost users in the previous three month period.
