Ireland’s overall GDP growth is projected to come in at 3.4% in 2021 and is set to reach 3.5% in 2022 on the back of strong private consumption, exports and a recovery in investment.
This is according to the European Commission’s Winter 2021 Economic Forecast, published today.
The Commission said the Government’s extended income subsidy schemes continue to cushion the economic impact of the Covid-19 pandemic.
It said that limited possibilities to spend, combined with income support imply that household savings will continue to accumulate at a historically brisk pace, which should boost consumption once restrictions are lifted.
The expected global recovery should also support strong growth in Ireland from the second half of 2021, it added.
The Commission said it estimates that the economy here grew by 3% in 2020, the only positive growth rate in the EU.
It said the economy was boosted by exports from multinational companies specialising in medical equipment, pharmaceuticals and computer services last year.
The Central Bank’s forecast published last month puts GDP growth at 3.8% this year and 4.6% next year.
The European Commission also forecast today that economic growth in the euro zone would be 3.8% this year and the same in 2022, rallying from a 6.8% drop in 2020.