Bank of Ireland economist Dan McLaughlin is predicting that the Irish economy will grow by 4.5% this year, significantly more than many other commentators have forecast.
In his economic outlook for 2004, Dr McLaughlin says the economy has adjusted to the global downturn with ease, and is poised to move closer to a 6% growth rate, reviving talks of the 'Celtic Tiger'.
He expects a rebound in exports and a recovery in business and consumer spending, driven by stronger employment growth and lower inflation. McLaughlin expects inflation to average 2% and the unemployment rate to climb to 5% in 2004.
The economist, who had previously predicted a euro-dollar rate of $1.05 to $1.10 at the end of 2003, says currency movements are unlikely to derail the Irish upturn, as the euro has remained stable against sterling.
On the public finances, McLaughlin believes the better than expected finish to 2003 already makes Budget forecasts redundant. He expects Exchequer borrowing to come in €1 billion below Charlie McCreevy's forecast, with a requirement of €1.8 billion.
He also argues that talks of a massive loss of competitiveness is overdone, as productivity has grown faster than wages.
