DUBLIN, April 1 (Reuters) – Ireland’s central bank on Thursday raised its 2021 economic growth forecast by half to 5.9% on improved multinational performance and export prospects, but warned the domestic economy would grow at less than half that rate.
The bank, which in January forecast 2021 GDP growth of 3.8%, said there were signs large global technology and pharmaceutical firms based in Ireland were maintaining strong growth registered last year when they helped lift Ireland to GDP growth of 3.4% despite pandemic lockdowns.
“We had quite a cautious, modest assumption with regard to growth in those multinational sectors but the data are showing that strong growth has actually been sustained” from 2020 into early 2021, Director of Economics and Statistics Mark Cassidy told journalists.
Prospects for exports have also improved due to the global rollout of vaccines and stimulus measures in the United States, the Central Bank said in a quarterly report on the Irish economy.
The domestic economy, as measured by Modified Domestic Demand, is forecast to grow 2.8%, rebounding from a contraction of 5.4% last year as the country emerges from one of Europe’s longest and deepest COVID-19 lockdowns.
The government on Tuesday announced that all shops were likely to open for the first time this year in May, while hospitality may begin to reopen in June, setting the stage for a rebound in the second half of the year.
Ireland’s unemployment rate is set to climb to 8.1% next year from 5.8% today as the withdrawal of government pandemic supports leaves around 100,000 more people unemployed than before the pandemic, the report said. (Reporting by Conor Humphries; Editing by Nick Macfie)
