Stability update: Economic recovery spreading faster – but economy faces big external threats

The recovery is spreading at a faster rate than predicted as consumers loosen their grip on savings and tax receipts run ahead of target, according to a new report on the Irish economy.

But it also warns of the dangers of Britain leaving the EU and the potential for other economic shocks due to global events. “Internationally the level of uncertainty is higher than…the height of the financial crisis,” the Government report says.

Finance Minister Michael Noonan will today claim growth projections made on Budget Day last October were too conservative and the country is actually in a better place than Fine Gael had argued during its ill-fated ‘Keep The Recovery Going’ election campaign.

The Irish Independent understands that Mr Noonan will tell the Dáil the recovery is “broadening” and the job now is “to make sure it broadens further, filtering to all parts of the country and to all citizens”.

The minister will submit a ‘Stability Programme Update’ to the European Commission this week, which predicts the economy will grow by 4.9pc in 2016, an upward revision of just over half of a percentage point since October.

However, it also admits that while the Department of Public Expenditure “will do everything possible to maintain expenditure within existing ceilings, it is nonetheless anticipated that some pressures will emerge later in the year”.

The report will be closely scrutinised ahead of any new budget.

Article Source: