Poll finds Ireland to lead eurozone growth

Ireland’s economy is likely to outperform the wider eurozone over the next five years, a new survey of financial analysts has revealed.

The latest member survey from CFA Ireland (the representative body for financial and investment analysts and portfolio managers) found that most respondents feel the eurozone economy will struggle over the course of the next five years, with three quarters saying the region’s inflation rate will remain below 2% during that time.

More than 80% of respondents, however, expect the Irish and global economies to grow this year.

This marks a substantial increase on the 50% who felt the same way in both the Dec 2012 and Jun 2013 surveys from the CFA.

Saying that, however, nearly 75% also feel that the biggest danger to Irish economic growth is an increase in government spending.

“There’s a clear view, among our members, that the recovery is fragile and would be jeopardised by an increase in government spending,” said CFA Ireland president, Ronan McCabe.

The view that the eurozone inflation rate will remain below 2%, with half of respondents expecting the main ECB refinancing rate still to be below 1% in three years’ time, indicates a strong view that the wider eurozone economy will struggle over the next few years, according to Mr McCabe.

“A majority also believe that Irish inflation will be between 0% and 2%, although there is a growing view among our members that domestic inflation may rise above 2%, a reflection on the strong positive sentiment on Ireland’s growth prospects in 2014 and beyond,” he said.

In Ireland, property is expected to deliver the best returns in 2014, followed by equities, with bonds expected to produce the poorest returns.

Just over half of the respondents to the survey expect the Irish equity market to perform broadly in line with international markets, a similar proportion as in the Jun 2013 survey. Over one third felt that Irish bonds would outperform global bonds in 2014. Source: The Irish Examiner