DUBLIN Oct 6 Ireland's central bank said on
Thursday it had cut its economic growth forecast for the second
quarter in a row, citing weakness in exports and domestic
It said risks were clearly tilted to the downside due to the
uncertain impact of Britain's exit from the European Union.
The Irish economy will grow by 4.5 percent in 2016, down
from a forecast three months ago of 4.9 percent, the bank said
in its quarterly report. Ireland's finance ministry on Tuesday
cut its 2016 forecast to 4.2 percent.
At that pace, Ireland will still probably be the EU's
best-performing economy. But the country's focus on exports and
its trade ties to Britain make it especially vulnerable to the
effects of Brexit.
The Central Bank said it had refrained from cutting its
forecast of 3.6 percent GDP growth in 2017 as the impact of
Brexit remained so unclear. The finance ministry is forecasting
growth of 3.5 percent.
"The initial fears in relation to the impact of Brexit on
the UK economy have given way to a less pessimistic assessment
in recent months," Central Bank Chief Economist Gabriel Fagan
said in a statement.
But "the potential for adverse macroeconomic, financial and
currency market effects to quickly re-emerge remains," he added.
"In such circumstances, risks to the latest forecasts remain
clearly tilted to the downside."
The central bank said the cut to the 2016 growth forecast
largely reflected a reduced contribution from exports, with
growth of 5.6 percent seen rather than 6.4 percent, with some
moderation also seen in domestic demand growth.
"A wide range of domestic spending and activity indicators
suggest that Irish economic activity continues to expand at a
healthy pace, though growth momentum may have slowed slightly
over the first half of the year," Fagan said.
(Reporting by Conor Humphries)