Irish business and employers representative group, Ibec, is forecasting continued buoyant growth in the wider economy and for the consumer this year.

The business group is forecasting GDP growth of 5.6% this year, while it has also forecast a buoyant consumer economy with growth of 2.6% in volume terms. 

2018 will see employment reach record levels here, but Ibec has also warned of competitiveness issues in the wider economy and has expressed concerns about a rising trade protectionist stance in the US.

Gerard Brady, Head of Tax and Fiscal Policy with Ibec said Irish consumers were experiencing the fastest rate of wage growth in Europe. Low inflation and record low interest rates are contributing.

"We're seeing about 2.2 million people in work this year for the first time, probably €100 billion in consumer spending for the first time in the Irish economy. It's the best you could do in the environment we're in."


However, Mr Brady said there were potential headwinds in the global and domestic economies. "We're also saying there are competitiveness threats in the economy. This year, we're going to move close to capacity in the economy. We're starting to see costs pushing up as they did in the early 2000s. We're very vulnerable to external risks. Prices have come down because of low interest rates and exchange rates. We're exposed if they turn around," he explained.

Gerard Brady pointed to the strong euro as an issue that would continue to cause headaches for indigenous exporters. "Over the last eight years, they've seen their exports grow by four times the rate they did in 2000-2007. Those competitiveness gains were hard won, but they're being turned over by the exchange rate for our major markets. If you see rising costs on top of that, it's going to be very difficult, in particular for manufacturers."

He also expressed concern about talk of a looming trade war between the US and China and the effect that could have on the Irish economy. "Tariffs on European goods are on pause but it would be a serious threat as we're a big exporter to the US. It's our largest goods export partner. We export a lot of food, pharma and tech. If we were to see a trade war with China, it would say something about the rollback of globalisation. That would be the major threat for the future of the Irish business model," he added. 

Specific industries could be harmed in the event of tariffs being placed on goods coming out of the EU. "The EU has said it would put tariffs on bourbon if the US puts tariffs on European goods. The US would then be expected to put tariffs on the whiskey industry which has been growing here on the back of exports, particularly to the US. It would be a real threat for specific industries," he concluded.

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MORNING BRIEFS - World trade fears have impacted on stock market investor confidence on Wall Street. Having made something of a recovery mid week, traders resumed heavy selling on Friday. According to one analysis by EPFR Global, nearly $40 billion has been pulled from US stock funds so far this year. 

*** German lender Deutsche Bank has confirmed that John Cryan will be stepping down as CEO. He will be replaced by deputy chief executive Christian Sewing. Deutsche's shares have fallen by almost a third this year and the bank has reported losses for three years.