Brexit won’t derail the economy, says business group

POSITIVE momentum in the economy is set to outweigh any negative impacts of Brexit through 2018, a leading business body has predicted.

Ibec, the group that represents Irish business, said the country had moved on from its post-financial crash ‘recovery phase’ and was now on a path of ‘strong and sustainable’ growth.

Ibec’s quarterly economic outlook has forecast 4.2% economic growth in 2018, having estimated growth in 2017 at 6%. It said its prediction was being underpinned by business investment and strong consumer spending.

The group said the likely impact of Brexit this year would be ‘outweighed by positive domestic and global momentum’. Gerard Brady, Ibec’s head of tax and fiscal policy, said: ‘Since the crisis, we have seen a recovery in the Irish economy which has been exceptional. This was driven by the strength of the Irish business model with record FDI [foreign direct investment] and an increasingly global footprint from our indigenous industries.

‘Because of this growth in our business substance, the economic recovery phase is now over, with 2017 seeing Ireland surpass many of the most important pre-crisis milestones. As we enter 2018, the State’s accounts are effectively balanced, employment has returned to 2006 levels, and we are seeing the quickest real wage growth in Europe at 1.8%.’

Mr Brady said that real disposable incomes are growing at over four times the eurozone average and per-capita income in working households now likely to have passed out its pre-crisis peak.

He added: ‘This phase is now more sustainable than the “boom” period.’

But one ‘major question’ facing the economy would be the ability to meet the needs of a growing population. ‘Major challenges are already clear in the housing sector,’ he said.