Trump and UK threat to our growth

BREXIT and threatened changes to US tax and trade policy are casting a shadow over Ireland’s economic prospects, a European Commission report has found.

In its series of autumn reports, the EC said its analysis of Ireland’s economic prospects broadly matches that of the Government.

Euro area growth is on track to expand at its fastest pace in a decade this year, with Ireland’s GDP growth forecast of 4.8% outstripping the average of 2.2%.

While the report found our budgetary plans for next year are ‘broadly compliant’ with commission requirements, it also found Ireland is highly exposed to external threats, such as Brexit uncertainty and Donald Trump’s threat to cut corporation tax.

It states: ‘The most important sources of uncertainty relate to the outcome of negotiations between the United Kingdom and the EU, as well as potential changes to United States tax and trade policies, to which Ireland is highly exposed as a small and very open economy.’

The report notes that while the economies of all EU member states are expanding and job markets improving, wages are slow to increase. It says: ‘The public finances of euro area countries have improved considerably.’

But added: ‘Today’s guidance stresses the need to strike the right balance between supporting the economic expansion and ensuring the sustainability of public finances.’