Tuesday, June 6, 2023
HomeEconomyIreland's central bank sees slower growth next year, higher inflation

Ireland's central bank sees slower growth next year, higher inflation

DUBLIN (Reuters) – Ireland’s central bank raised its 2023 inflation forecast and lowered its third-quarter growth forecast for the third quarter in a row, though the drag on disposable income is expected to be somewhat lower Relief

The bank still sees its preferred economic growth indicator, revised domestic demand (MDD), to grow 2.3% next year and raised its forecast for this year to 6.4% as investment in the first half of the year is likely to be one-off Sexuality increased significantly.

However, it had forecast 2023 three-month MDD growth of 4.2% before longer-term price pressures due to higher energy costs forced it to reduce next year’s The inflation forecast was revised up to 6.3% from 4.2% previously.

With inflation currently estimated at 8.6%, the bank also raised its forecast for 2022 to 8% from 7.8% and said the outlook for inflation remains Upside risks, downside risks to growth forecasts.

“Developments that will dampen the expected pace of economic growth this winter and next year as households and businesses defer less-essential spending and investment given uncertainty and more constrained real incomes, ” the central bank said in its quarterly bulletin.

Its inflation forecast is lower than the forecast released by the Irish Treasury last week. The Treasury is also more pessimistic about the economic outlook, forecasting MDD growth of just 1.2% next year.

The impact of the energy crisis is likely to reduce the impact of the energy crisis, the central bank said. Average real household income fell 3.3% this year, the biggest drop in more than a decade.

Wage growth is more pronounced – expected to increase by 5.8% in – expected to start to moderate It added that there will be a decline in the second half of next year.

Regarding the recent economic turmoil in neighbouring UK, the central bank said that the less favourable growth path there would only have a slight negative impact on Ireland’s outlook, while taking into account the level of imports from the UK, A sharp appreciation of the euro against the pound would lead to subdued inflation.



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