Government Revises Down Domestic Economic Projections [Video]

The government has revised downward its projections for domestic economic growth this year and said that data suggests the economy is in “reasonable shape”.

In its Stability Programme Update, published on Tuesday, the Department of Finance pointed to the resilience of the labour market, with three-quarters of people now in employment, and to inflation subsiding faster than expected.

However, there has been a “loss in momentum for key measures of demand” in recent quarters, particularly in consumer spending and private sector investor due to inflation and resulting monetary tightening.

Looking ahead, the government said to expect real wages to increase, boosting household incomes and real volumes of consumer spending from the second half of the year.

The government anticipates that Modified Domestic Demand (MDD), its preferred measure of domestic economic growth, will increased 1.9% this year, down from 2.2% in its forecast last autumn.

Consumer spending, the largest component of MDD, is expected to increase 2.4% in 2024 and 3.1% in 2025 …