Goodbody upgrade Irish GDP for 13

Latest forecasts from analysts at Goodbody’s gives rare GDP upgrade for the Irish economy for both 2013 and 2014 on the back of some encouraging economic data, adding that a bailout exit in 13 is “attainable”.

The brokers now expect GDP to grow by 1.6pc in 2013 compared to their previous forecast of 1.3pc and 2.6pc in 2014 compared to 2.3pc previously.

Domestic demand is expected to decline by 0.4pc in 2013 and increase by 0.5pc in 2014 previously -0.8pc and 0.4pc, it said.

“After a painful adjustment, the Irish economy is showing some more hopeful signs. While still down 25pc from its peak, domestic demand grew in Q3 2012 for the first time in over four years. Net trade continues to grow strongly, while the current account has moved from a large deficit to a large surplus. Most encouragingly, Ireland’s bond yields have continued to fall and the sovereign, the banks and the semi-states have all returned to primary issuance,” the report said

It went on to say that, given the recent momentum in Irish bonds and Ireland’s comfortable funding position, an exit from the IMF/EU programme is attainable

“Indeed, positive newsflow on Ireland is likely to be a feature in the first six months of 2013 pro-note deal, Presidency. However, given the risks that still exist around the implementation of further fiscal measures in particular, we believe that Ireland should utilise the funding backstops that are now available in the euro area, including the ESM precautionary credit lines and OMT.”