Autumn 2021 Economic Forecast: From recovery to expansion, amid headwinds

The analysis points out that Ireland's GDP is expected to grow very strongly this year, driven by the activities of multinational companies and supported by a domestic recovery. Private consumption is rebounding as households’ saving patterns normalise, while domestic investment — particularly in construction — is expected to register robust growth over the forecast horizon. Inflation has picked up and is projected to increase further in 2022. The fiscal outlook is set to improve from 2021 onwards, with the headline deficit ratio reaching 0.3% in 2023.

The Autumn 2021 Economic Forecast projects that despite mounting headwinds, the EU economy is to keep expanding over the forecast horizon, achieving a growth rate of 5%, 4.3% and 2.5% in 2021, 2022 and 2023 respectively. Growth rates for the euro area are projected to be identical to those for the EU in 2021 and 2022, and 2.4% in 2023. This outlook depends heavily on two factors: the evolution of the COVID-19 pandemic and the pace at which supply adjusts to the rapid turnaround in demand following the re-opening of the economy.