Ireland Country Risk Reports Q2 2015
Ireland’s economy will expand at the fastest rate of any eurozone economy for the second consecutive year in 2015.
Falling unemployment, rising wages and low inflation should all boost household disposable incomes. This suggests domestic demand will play a bigger role driving economic growth.
Although a recovery in imports will probably shrink the trade deficit in 2015, Ireland’s exposure to US and UK demand suggests exports should remain steady, supporting the economy.
Declining support for Ireland’s main two parties means the outcome of the 2016 general election is becoming harder to call. The ruling Fine Gael/Labour coalition looks unlikely to remain in power in its current form, suggesting an increased chance of new coalitions being formed in the run up to the vote.
W hile threats to Ireland’s favourable operating environment for multinationals will grow over the coming quarters, they are unlikely to pose any significant risks as early as 2015.
Major Forecast Changes
We have revised our real GDP growth forecasts up to 3.1% in 2015, from 2.8% previously, on the back of a brighter outlook for the Irish consumer.
- Executive Summary
- Core Views
- Major Forecast Changes
- Key Risks To Outlook
- Chapter 1: Political Outlook
- SWOT Analysis
- BMI Political Risk Index
- Domestic Politics
- Political Landscape Becoming More Uncertain
- Declining support for Ireland's main two parties means the outco me of the 2016 general election is becoming harder to call . The ruling
- Fine Gael/Labour coalition looks unlikely to remain in power in its current form, suggesting an increased chance of new coalitions being
- formed in the run up to the vote. A pact between Fine Gael and Fianna Fail would offer the most realistic chance of either of Ireland's
- main two parties forming the next government.
- TABLE: Political Over vie w
- Long-Term Political Outlook
- Political Challenges Beyond The Recession
- Although political risk in Ireland is generally quite low, the country's economic downturn has put several structural issues into the
- spotlight. Challenges over the next decade will include demographic changes, regaining living standards , migration and the country's
- relationship with Northern Ireland .
- Regional Political Outlook
- EU Headed For Fresh Political Crises
- The rise of far-left, far-right and other anti-establishment parties will cause significant problems for EU policymakers over the next few
- years. While most of these non-traditional parties are unlikely to win power, mainstream parties will adopt some of their rhetor ic to
- woo their support er s. This means less pr ogress trimming budget de ficits in the eurozone periphery and more opposition to the EU's
- freedom of movement for workers principle in Western Europe. Alongside t he region's stuttering economy and perceived ineptitude
- dealing with the Ukraine crisis over Russia, the EU's waning credibility suggests that existential threats to the eurozone could be the
- most significant since 2012 over the next few years.
- Chapter 2: Economic Outlook
- SWOT Analysis
- BMI Economic Risk Index
- Economic Activity
- Domestic Economy To Play Bigger Role
- Ireland will remain the fastest growing eurozone economy in 2015, with domestic demand set to play an increasingly significant role
- driving growth. The economy will also continue to benefit from the country's limited exposure to eurozone demand and attractive
- operating environment for multinationals.
- TABLE: Economic Acti vit y
- Regional Monetary Policy
- Q&A On ECB QE
- TABLE: Eur opea n Central Bank–Capital Key for Eur ozone Me mbers
- Chapter 3: 10-Year Forecast
- The Irish Economy To 2024
- Solid Long-Term Growth Outlook
- We hold a br oadly positive view towards Ireland’s economic growth prospects over the long term, with growth expec ted to average
- over 3 % per annum over the next ten years. While exports will remain a key driver of growth , we expect the economy to rebalance
- towards a more consumption- driven model over the next few years.
- TABLE: Long-Ter m Macr oec onomic Forecasts
- Chapter 4: Operational Risk
- Operational Risk Index
- Chapter 5: Key Sectors
- Food & Drink
- TABLE: Food Consu mpti on Indicators –Hist orical Data & Forecasts
- TABLe: Hot Dri nk Value /Volu me Sales , Producti on & Trade –Hist orical Data & Forecasts
- TABLe: Mas Grocer y Retail Sales By Format –Hist orical Data & Forecasts
- Other Key Sectors
- Table : Phar ma Sector Key Indicators
- Table : Telec oms Sector Key Indicators
- Table : Aut os Sector Key Indicators
- Table : Infrastructure Sector Key Indicators
- Chapter 6: BMI Global Assumptions
- Global Outlook
- New Era For Oil
- Table : Global Assu mpti ons
- Table : Devel oped States , Real GDP GrowtH, %
- Table : BMI VERSUS BLOOM BERG CON SENSUS REAL GDP GROW TH FORECASTS, %
- Table : Emergi ng Mar kets , Real GDP Growth , %