INTERESTINGLY, in spite of all the external threats to our economy, the Brexit uncertainty foremost, the Economic and Social Research Institute (ESRI) has revised its growth forecast for this year and next marginally upwards in its latest Quarterly Economic Commentary. The domestic economy is now expected to grow by 4.0 per cent in 2019 and 3.2 per cent in 2020.
These forecasts are subject to the technical assumption that the UK’s continued membership in the EU will effectively remain in place after October 2019. However, if Boris Johnson wins the Conservative Party leadership race and becomes Prime Minister of the United Kingdom, the likelihood of a no-deal Brexit increases and, with it, will come pressures on the Irish economy if our exports to Great Britain and Northern Ireland have tariffs imposed on them.
Also, with our unemployment rate forecast to drop to 4% by the end of 2020 and the domestic economy operating at full capacity, the ESRI feels that it may be necessary for the government to take budgetary measures to prevent the economy from overheating next year. This would necessitate tax increases in some areas, but politicians anticipating a general election would be very reluctant to impose these