Davy upgrades economic growth forecast for 2015 to 6.5pc

Davy has lifted its predictions for Irish GDP growth for the year, revising upwards from 3.7pc to 6.5pc.

The firm now expects growth of a 6.5pc in 2015, 4pc in 2016 and 3.6pc in 2017, up from its previous projections of 3.7pc in 2015 and 3.4pc in 2016.

Davy said: “The ongoing recovery, led by export growth and foreign direct investment, is now spreading into the domestic economy.

“Several tailwinds have also accelerated the pace of expansion in 2015: tax cuts and lower oil prices have increased consumer spending, and the weak euro has helped competitiveness, with exports benefitting.

“Looking forward, the €1.2-1.5bn Budget giveaway, worth 0.7% of GDP, will sustain above-trend GDP growth.”

It added that it expects the Government deficit to fall to 1.7pc in 2015 and to 1.1pc next year. It predicts that Government debt will fall to 98.9pc at end-2015 and to 89.9pc by end-2017.

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