Davy is latest forecaster to lower Irish growth expectations
Davy Stockbrokers is the latest forecaster to lower its expectations for Irish economic growth this year.
Despite broadly remaining positive, Davy has lowered its GDP growth forecasts from 5.6% to 5% for 2019.
It expects the economy to grow by 4.1% next year, with Brexit uncertainty remaining the chief threat.
"We still expect that the UK will remain inside the EU single market in 2019 and 2020, most likely through a long Article-50 extension or eventually through the withdrawal agreement being passed," said Davy's chief economist Conall Mac Coille.
"A hard Brexit would be highly damaging to both the UK and Ireland but remains unlikely. Indeed, once the threat of no-deal is removed, sentiment indicators could rebound," he said.
With its 5% growth projection, Davy remains the most buoyant commentator on the Irish economy's outlook for this year.
The Government's most recent assessment was for 4.2% growth, while economic think-tank the Economic and Social Research Institute (ESRI) recently lowered its 2019 GDP growth forecast from 4.2% to 3.8%.
The OECD, IMF and European Commission all expect the Irish economy to grow by around 4% this year.
Last week, the Central Bank marginally lowered its 2019 outlook to 4.2%.
"The big picture is that the economic performance remains strong despite what may be the peak of Brexit uncertainty. Exports are likely to prove resilient to weaker global demand, concentrated in defensive sectors such as pharmaceuticals and agri-food and with foreign direct investment remaining strong," said Mr Mac Coille.
"Our forecast is for consumer spending to grow by 3.1% in 2019 and 2020, public spending by 5% and 4% respectively and investment by 6.6% and 5.4%. Exports are projected to expand by 6% this year and 5.6% in 2020," he said.
"Global demand may be weaker, but the export sector is highly defensive - concentrated in agri-food, pharmaceuticals and information and communications technology [ICT] services," he said.
Davy also said it expects a 20% rise in the number of new houses built, this year, to 21,800; house prices to rise by 4% and the mortgage market to grow from €8.7bn to €9.8bn.
Last week, the Central Bank said Irish bank lending levels and access to credit for consumers and SMEs shouldn't be adversely affected even in a worst-case Brexit scenario.
