Davy has downgraded its GDP growth forecast for Ireland's economy, though it still anticipates a strong performance this year.
The stockbroker now expects Ireland’s GDP to expand by 5.5%, down from its previous prediction of 6.9% growth.
It says the revision is due to volatility relating to the country’s exports and the performance of the multinational sector.
Last week the Economic and Social Research Institute (ESRI) recently made a significant downgrade to its GDP growth forecast, from 3.5% to 0.1%.
That was due to a slowdown in exports – particularly in the pharmaceutical and chemical sectors.
However Davy has made a more modest reduction, as it expects the export slow-down to be short-lived.
It also anticipates solid growth in employment, consumer spending and domestic demand.
Davy currently predicts employment growth of 4.2%, with consumer spending rising by 5.3%.
Modified domestic demand will rise by 3.4%, it says, while output in the indigenous sector will grow by 4.9%.
This will help the Government to record a €12 billion surplus this year – representing 2.2% of GDP.
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The surplus will increase to €16 billion (2.8% of GDP) next year.
However Davy also sees Irish growth easing in 2024, as interest rate increases weigh on activity – and capacity constraints spark a tightening in economic expansion.
It is currently predicting GDP growth of 4.5% next year, with modified domestic demand slowing to 2.5%.
Consumer prices will rise by 5.5% this year, it says, with the pace of inflation easing to 2.8% next year.
