Ireland outpaces EU average again with 6.7pc GDP rise
ECONOMIC growth came in at 6.7pc in 2018, and although it slowed in the second half of last year, Ireland has experienced the most rapid growth of any eurozone country since 2014.
Strong exports were once again behind the strong growth seen here, according to data from the Central Statistics Office released yesterday.
However, there were signs that consumer demand was kicking in – even as Brexit loomed – as higher State salaries fed through.
The fourth quarter saw GDP growth slow to 4.9pc from a year earlier and the economy expanded just 0.1pc from the third quarter, largely due to the strong performance in the third quarter.
Despite the slowdown, growth here was still well above the 1.8pc pace recorded in the 19-member single currency bloc.
“Importantly, the growth in the economy is broad-based with positive underlying contributions from both the domestic and multinational sectors,” Minister for Finance Paschal Donohoe said in a statement.
Gross national product, which gives a better picture of the performance of the economy, expanded by 5.9pc and there was growth in investment and government activity as well as in consumer spending.
Exports in the full year rose 8.9pc from 2017 and were the driving factor behind the growth numbers, the CSO said.
Brexit could take a bite out of agricultural and food exports while a slowing eurozone and world economy could hit demand for other exports.
The British export market is worth €14bn a year and Minister Donohoe highlighted the risks to the economy from tariff and other barriers.
“The Brexit cloud hangs over the economy and, as I outlined in January, the impact on the most-exposed sectors of the economy could be severe,” he said.
Farming groups say that an €800m a year market for beef will disappear if the industry loses tariff-free access to the UK and meat from non-EU states is allowed in on the same terms as Irish products.
The economic picture looks set to darken in 2019, largely thanks to Brexit, although growth was expected to moderate to the 4-4.5pc range by most forecasters.
The wild card is Brexit.
Estimates from the Central Bank say that in the event Britain leaves without a deal, growth here could be as little as 1.5pc this year.
Other economic data released yesterday continued to suggest that there were few signs that rising wages were feeding through into capacity constraints in the economy to push inflation higher.
The headline annual rate of inflation was 0.6pc in February, down from 0.7pc in the previous two months.
Meanwhile, the French economy will grow marginally slower this year than previously expected although improving household purchasing power should help limit the impact of a global slowdown, the country’s central bank said on Thursday.
The Bank of France now forecasts growth of 1.4pc this year. The economy there grew 1.5pc in 2018.
Even so, France will easily outperform Germany this year, where growth of 1pc or lower is expected.
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