Ireland’s domestic economy will slow sharply to 0.9 per cent next year as rising prices hurt household incomes, the Organization for Economic Co-operation and Development predicts.
It comes after brisk 8 percent growth in modified domestic demand this year, a metric wiping out the multinational sector.
Gross domestic product – which includes the multinational sector – is expected to grow 10.1 percent, faster than expected, the Paris-based OECD said, more than double its earlier forecasts.
It comes well ahead of Ireland and the most recent EU forecasts for the year, placing Ireland at the top of the 38-member OECD rankings in 2022.
But the multinational sector is also expected to slow down over the next year, albeit not at the same pace as the rest of the economy.
GDP is expected to fall to 3.8 percent in 2023 and 3.3 percent in 2024.
Ireland’s GDP growth is ahead of the global economy, which is set to slow to 3.1 per cent this year and 2.2 per cent next year, and recover slightly to 2.7 per cent in 2024 – well below pre-war forecasts.
Germany and the UK face mild recessions next year, while the US and broader European economies fall sharply, the OECD said.
The Russian economy is projected to register negative overall growth in 2022, which will continue into 2023.
Global growth will depend on a recovery in emerging Asia, the OECD predicted.
“The global economy faces serious headwinds. We are dealing with a major energy crisis and risks remain on the downside as lower global growth, high inflation, weak confidence and high levels of uncertainty mean successfully navigating the economy out of this crisis and back into one make sustainable recovery very difficult,” said OECD Secretary-General Mathias Cormann.
Earlier this month, the European Commission revised up its forecast for Ireland’s GDP this year to 7.9 per cent – more than two points above previous estimates – but next year’s forecast by just over a point to 3, 3 percent lower.
It said modified domestic demand – which excludes multinational patents and aircraft leasing – will fall to 2% next year from 8.6% in 2022, a much more pessimistic forecast than the Central Bank of Ireland.
https://www.independent.ie/business/irish/irish-economy-to-power-ahead-of-rest-of-world-this-year-oecd-42163652.html Ireland’s economy will slow sharply next year after boosting in 2022, OECD says