Economy vulnerable to global events – Ibec

• Published date: 15 April 2024
• Author: LAURA SLATTERY
• Publication title: Irish Times (Dublin, Ireland)

Irish economic policy now has “less room for error” amid changes in the global economy that are likely to bring heightened uncertainty to exporters, business group Ibec has warned

In its latest quarterly economic outlook, Ibec said the global economy was entering a period of major change that would see more competition for investment in new technology, falling levels of trade openness and rising geopolitical risk.

The resulting uncertainty and volatility in the business environment facing Irish companies selling abroad will increase focus on reducing vulnerability to inflationary swings and addressing competitiveness concerns, it said.

“For domestic policy, these changes in the global economy will reduce the margin for error when it comes to improving our domestic cost competitiveness, skills, infrastructure and capacity to innovate.”

Growth in GDP

Nevertheless, Ibec is forecasting growth of 2 per cent in gross domestic product (GDP) and 3.4 per cent in 2025, with higher export growth, investment and the overall economy expected this year and next as inflationary pressures ease and interest rates are cut.

This is an upgrade on the forecasts in its previous quarterly outlook, which predicted growth of 1.6 per cent this year and 2.9 per cent in 2025.

“Much of the underperformance in exports and capital investment last year was driven by once-off impacts caused by the timing of big investment decisions and reducing demand for Covid-related products in the biopharma sector,” said Ibec head of national policy and chief economist Gerard Brady.

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