Ireland's economy is exceeding forecasts, says financial firm
Financial firm Investec has significantly upped its growth estimate for the Irish economy for the year to 6.1%.
In its latest quarterly, Irish Economy Monitor released yesterday, Investec said that its previous forecasts for GDP, of growth of 4% this year, with a further 3.7% in 2016, were "too light".
Chief economist Philip O'Sullivan said: "Having reviewed the recent data, we move our forecasts to growth of 6.1% in 2015 and 5% next year." Investec is also predicting GNP growth of 6.5% this year and 5.2% next year.
It said its reasons for upgrading its forecast included recent figures which show that GDP expanded by 7% in the first half of the year and growth in all three PMI indicators (construction, manufacturing and services).
Mr O'Sullivan added: "The upturn is also contributing to a marked strengthening in the public finances, with the general government deficit now expected to come in at only 1.4% of GDP this year.
"We previously pencilled in 2.1%. We now foresee gross general government debt falling to a five year low of 102.5% of GDP by year-end. [It] was 106.7%.
"Adjusting for the government's valuable stakes in the banking sector and expected windfalls from both IBRC and Nama pushes the public debt ratio below 100%".
Mr O'Sullivan said that possible problem areas for growth could be uncertainty around the upcoming general election, troubled conditions in emerging markets and the tightening of monetary policies in both the US and the UK.
The Fine Gael and Labour government is increasingly being tipped to hold an election before the new year following a series of positive economic indicators.