Ibec chief predicts GDP growth – but warns of Brexit impact on economy

Danny McCoy
Danny McCoy

The group that represents Irish business this week forecasts GDP growth of 4.1% in 2019 – with an equally positive outlook for other economic indicators such as employment and consumer spending.

However, Ibec’s latest Quarterly Economic Outlook Q4 2018 also warns that growth will be weaker than in recent years as Ireland is now at a mature phase of the business cycle with the economy close to capacity and as cost competitiveness erodes.

And, above all, the outcome of the Brexit deal will largely determine the economic fortunes of the country in 2019.

Commenting on the report, Ibec’s CEO and Galway native Danny McCoy, reflected on how far the country had come from the trough of the economic crash.

“Ten years on from the financial crisis our globalised business model has delivered an improvement in living standards that many did not think was possible,” he said.

“As a result, the Irish economy comes into 2019 on the back of growing employment, wages, and incomes.  Business investment is at record levels and the global footprint of Irish companies has never been larger,” he added.

But despite this, he warned that risks to the economy and business model were on the rise.

“Many firms will face a more difficult period in the months ahead due to sterling weakness and continued Brexit uncertainty,” he said.

“This uncertainty is already impacting business decisions with a slowdown in SME lending in recent months as companies hold back investment decisions until there is a clearer understanding of what the final relationship between the EU and the UK will look like.

“Many companies are also implementing very costly contingency measures such as holding higher stock levels. Almost seven out of ten exporting firms (69%) do not have experience of dealing with tariffs and customs arrangements.

For more, read this week’s Connacht Tribune.

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