Ireland's new Taoiseach and leader of the Fine Gael party, LeoVaradker, will focus the majority of his early tenure on ensuring afavourable Brexit deal for Ireland, including preserving both tradeaccess to the UK and preventing a hard border between the Republicand Northern Ireland, as well as passing a 2018 budget.
The political environment will remain relatively unstable in the yearsahead, although we expect the current 'confidence and supply'agreement with the Fianna Fáil party to continue and do not expectan early general election to be called.
The Irish economy is set to continue growing at a robust pace overthe coming years, outperforming eurozone averages. An improvingexternal environment will support the near-term economic outlook,as will solid capital expenditure and construction investment.
Nominal GDP has been artificially inflated by a process of corporaterestructuring and balance sheet inversions of multinational corporationsbased in the country, which has done less to boost actualproductive capacity of the economy than the headline reading suggests.
The nascent recovery across Ireland's construction sector looks setto continue, especially in light of an easing of austerity measures bythe government.
Ireland's fiscal position will gradually improve over the coming years,with the government's budget balance gradually heading into surplus.
The public debt ratio is projected to continue falling over the forecasthorizon.
When expressed on a per capita basis or in terms of governmentrevenues – rather than GDP – the public debt profile looks far moreprecarious and is elevated compared to eurozone peers.