'We can enjoy growth for 10 years if we learn from past', says Michael Noonan
THE country is enjoying its best growth period since the economy collapsed in 2007.
Finance Minister Michael Noonan is estimating that the economy will grow by 4.5pc this year. With the Budget only weeks away, Mr Noonan confirmed there will be no need for any additional tax hikes or spending cuts next month to meet the Government's targets.
Last week, he estimated that the economy would grow by 3pc but readjusted his prediction following yesterday's data from the Central Statistic Office which shows the country's economy grew by 7.7pc between April and June last.
"My people advising me tell me that it's a trend that will continue. We'll be marking up the growth figures for 2014 and 2015," Mr Noonan said.
"It'll settle around 4.5pc in GDP for 2014. We haven't run the numbers yet, but it will be somewhere around there. Bit less for next year."
The growth predictions means the Budget deficit should be lowered.
The deficit is now estimated to come in at around 3.5pc of GDP this year. That compares with an estimate in April of 4.8pc.
"The figures are due to the policies pursued by Government for the last three years and the sacrifices made by the Irish people. It shows that sticking to the policies is now bearing fruit," Mr Noonan said.
Both domestic demand and net exports are contributing to growth, the Central Statistics Office (CSO) said.
"This is something that we haven't seen for quite a long time," the CSO's Michael Connolly said.
The mood in government is upbeat following yesterday's economic forecast.
"This is the strongest growth rate recorded since the early 2000s and shows that the strong and stable recovery in the Irish economy is well under way and is starting to be felt across all sectors of the economy," Mr Noonan added.
"Most encouragingly, the figures are showing the domestic economy growing, with consumer spending up 1.8pc year on year."
Mr Noonan said the Government hopes to have steady annual growth of about 3pc over the coming years.
"Obviously, at the start when you're in a catch-up phase, you'll get very high growth figures in the early stages.
"But as it settles, I would hope to have growth of around 3pc for the next five years and, God willing, for the next 10 years if we can avoid the boom and bust model," he said.
Merrion Stockbrokers estimated that the economy could grow by 5pc this year.
"Taking all the factors into consideration, these latest numbers are gangbusters," said Alan McQuaid.
"GDP growth for the year as a whole is now likely to be 5pc or higher in real terms, easing the pressure on the fiscal front for Budget 2015.
"Although the Eurozone as a whole is struggling, Ireland has benefited from its close trading ties with the US and UK, two of the strongest performers on the world stage this year."
Business lobby group IBEC said the figures reinforce the scope for tax cuts in the Budget.
"A broad-based recovery has firmly taken hold. The economy is re-balancing, with domestic demand and net exports contributing to stronger growth.
"Investment is up 18.5pc and personal consumption is up 1.8pc, but more can be done to improve this by reducing income and consumer taxes," said IBEC's Fergal O'Brien.
Dan White: Page 16