New research by PricewaterhouseCoopers (PwC) says Slovenia will have the highest growth in the Eurozone countries during 2007 after Luxembourg.
New research by PricewaterhouseCoopers (PwC) says Ireland will be beaten into third place by stronger performances by Luxembourg and Slovenia.
Growth however is forecast at 5.2% for this year followed by 4% in 2008.
The figures are broadly in line with last week’s projections for the economy over the same period from the Central Bank.
Strong momentum in Europe will sustain good Irish growth, but there is a sting the tail.
According to the report the strength of demand in the eurozone economy and the in built implications for rising prices should result in further increases in interest rates this year, suggesting no respite for hard pressed borrowers.
By next year PwC says the economy will have been beaten into third place in the European growth league by stronger performances from Luxembourg and Slovenia.
This year’s growth figures are still more than double the average for the euro area as a whole.
Investment and exports were the main drivers behind the first quarter economic expansion, as consumer spending contributed little to the overall growth figure, said the report.
Looking ahead, it warned consumers were likely to remain cautious in view of rising interest rates, the housing market slowdown and fewer maturing SSIA accounts.
Overall the growth outlook for the next 18 months for this economy is still quite positive, boosted by the strength of the eurozone economy which will help to drive Irish exports in the current year.
The report warns however that competitiveness issues, triggered by the stronger euro and “Ireland’s high rate of inflation are expected to undermine exports growth prospects towards the end of 2007 and during 2008”.
The report is positive about the performance of the eurozone economy in 2007, when the region is expected to expand by 2.5%, giving its best performance in five years.
However that pace of growth is forecast to slow to 2.2% in 2008, which is still satisfactory based on the eurozone economy’s historic trend, said PwC.
