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European Commission Forecasts Ireland’s Economy to Outpace EU and Eurozone Growth, Expects 1.2% Growth in 2024

Dublin: The European Commission has noted a significant rebound in Ireland’s economy, signalling a departure from the technological recession that had gripped the nation. According to the Commission’s initial economic forecast for the year, Ireland is poised to outpace both the European Union and the Eurozone in terms of growth.

Projections indicate that Ireland’s economy is set to expand by 1.2 percent this year, surpassing estimates for growth within the EU and the Eurozone. The Commission forecasts a 0.9 percent growth for the EU economy this year, revised downward from previous estimates, with a more optimistic outlook of 1.7 percent growth expected in 2025. Similarly, growth within the Eurozone is anticipated to be 0.8 percent in the current year, rising to 1.5 percent in 2025.

GDP Growth to Reach 3.2 Percent

The Commission projects a robust GDP growth of 3.2 percent next year, primarily fueled by exports. However, the forecast does not incorporate projections for Ireland’s modified domestic demand (MDD), a metric excluding certain elements like patents and aircraft leasing from GDP calculations. Despite a slightly reduced growth rate compared to last year, MDD is expected to continue expanding, according to the Commission.

Decrease in Inflation

Inflationary pressures are expected to ease in Ireland this year, with the rate projected to decrease to 2.2 percent from last year’s 5.2 percent. The Commission further anticipates a decrease to 1.9 percent next year. Lower inflation, coupled with a stronger labour market, is predicted to bolster real income for Irish citizens, contributing to private economic growth in the coming years and driving increased consumption.

Exports Set to Surge

Ireland’s export sector is poised for continued growth in both 2024 and 2025, benefiting from recent substantial investments and favourable external trade conditions. Despite a 1.9 percent contraction in the gross domestic product (GDP) attributed to multinational transactions last year, the outlook is positive for export expansion in the near future.

Commissioner Paolo Gentiloni highlights expectations for inflation rates across the European Union, with a forecast of approximately 3 percent for the current year and a decrease to 2.2 percent in 2025. Within the eurozone, inflation is projected to reach 2.7 percent this year, declining to 2.2 percent by 2025.

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