The country's gross domestic product is expected to grow by 3.9% this year - and by 3.2% next year - according to a weighted average of 13 leading indicators. The study is carried out by DKM economic consultants, which believes that the forecasters are fairly conservative in their outlook.
Annette Hughes, director of DKM, said the estimates for this year were well below the performance for last year when we saw GDP growth of 4.8%, giving Ireland the fastest growing economy in the euro zone. "The Department of Finance and other official forecasts are among the least optimistic. We'd expect to see upward movement as the year progresses. The likes of the ESRI and Bank of Ireland are expecting growth of 4% plus this year, with Ibec forecasting a similar performance to last year," she explained.
Among the factors that might give cause to increase forecasts were the decline in the euro and energy price falls. "With regard to debt, the cost of servicing is less of an issue now because interest rates are so low. We have scope to reduce our debt-GDP ratio with the economy growing so strongly," she said. DKM advocated refinancing our existing debts with cheaper borrowing on the markets which would, in turn, allow further flexibility in the budget.
Ms Hughes said domestic demand would contribute further to economic growth this year with the consumer making even more of a comeback. "We saw domestic demand recover in 2014 for the first time since 2007 with a big contribution from the investment side. Over this year and next, we'll see a more balance contribution from the consumer with a recovery in private consumption. Overall, domestic demand is expected to grow at 3.7% this year compared to 2.9% last year albeit with public spending growing at meagre rates of around 0.5% this year." Ms Hughes said Ireland stood well to benefit from the ECB's QE programme given the open nature of the economy and our strong trading links with the US and the UK.
MORNING BRIEFS - The European Central Bank says it hit its spending target in the first month of its QE programme which saw it buy up some €60 billion in bonds and private assets. The breakdown comprised of just over €52.5 billion in government debt with the remainder being made up by private sector bonds. It is the first step in an 18 month programme that will see the ECB pump €1.1 trillion of newly minted money into the euro zone economy in an effort to kickstart growth and inflation.
*** Aer Lingus carried 815,000 passenger in March - that was up over 2% on the numbers it carried in the same month last year. Short haul traffic was down marginally, but long haul passenger numbers were up over 25% to 94,000. The airline introduced a number of new routes to the US in the last year.