Irish economy expected to grow by over 11% this year, says report
This is assuming the continued easing of public restrictions and that Covid-19 vaccine delivery rolls out as planned.
The Irish economy is expected to record "substantial growth" in 2021 as public health measures are lifted, according to a new report from the Economic and Social Research Institute (ESRI).
The ESRI's Quarterly Survey said that it expects Ireland's gross domestic product (GDP) to grow by over 11% this year, assuming the continued easing of public restrictions and that Covid-19 vaccine delivery rolls out as planned.
According to the report, the strong performance of the Irish export sector is driving much of this growth, as exports grew by 17% in the first quarter of 2021 year-on-year.
While trade disruptions due to Brexit are likely to impact specific sectors, overall exports are still expected to rise by 13.3% for the year as a whole.
The ESRI also says domestic demand is expected to rebound strongly, stating that as the economy reopens, it is anticipated that consumption will grow by 7.5% in the present year.
Investment is expected to increase significantly throughout the second half of 2021 as well as economic activity resumes, rising by 5.8% overall.
In terms of the labour market, the pandemic adjusted unemployment rate decreased from a high of 30% in April 2020 to 22.4% in April 2021.
It is expected unemployment will fall to 9% by the end of 2021 as economic activity resumes and to average 7.1% in 2022.
Between 2020 and 2021, the report estimates that the cost to the Irish economy of Covid-19 is approximately €24 billion in terms of lost output.
However, by 2022, the economy is set to get back to where it would have been if the pandemic had never occurred.
One of the report's authors Conor O'Toole said: “If public health measures continue to be eased, the Irish economy will grow very strongly this year.
"While the export performance may tip the economy into double digit growth, domestic demand is also expected to rebound strongly with household spending and investment recovering.”