The Irish economy faces “major risks beyond its control” this year, including the Brexit fallout and US corporate tax reform, according to research by Goodbody Stockbrokers.
However, in its latest health check on the economy, Goodbody said there is still “significant domestic momentum”.
The financial services firm has also made a number of ‘big calls’ for 2017, which it believes will come to pass.
They include the minority Government surviving, the State to sell 25% of its stake in AIB, and a hard Brexit to contribute to “bouts of political uncertainty”.
The report said consumer spending, buoyed by ongoing real disposable income growth, and construction, will contribute to core domestic demand growth of 3.6% in 2017, following on from the 3% achieved last year.
Goodbody Chief Economist Dermot O’Leary also expects the housing recovery to gather pace, “with supply shortages, ongoing household formation, easier lending standards and government support all contributing”.
He added that based on this planned growth, it has increased its house completion forecast by 2,000 units to 18,500, but said “that remains well below medium-term demand of circa 30,000”.
In its report, Goodbody also anticipates a return to net mortgage lending growth for the first time since 2009, with new mortgage lending predicted to grow to €7 billion.