Irish economy to grow by 5.8 pct this year: central bank

Ireland's economy continues to improve, with its gross domestic product (GDP) forecast to grow by 5.8 percent in 2015 and 4.7 percent in 2016, according to the country's central bank on Tuesday.

In its latest twice-yearly Macro Financial Review, the Central Bank of Ireland said the Irish economy has continued to grow robustly in 2015, citing a stronger impetus to growth from domestic demand.

"Stronger domestic demand is evident, supported by an improving labor market and rising real wages which benefit the household sector directly," it said.

"The non-financial corporate sector is seeing strong growth in exports, while investment is forecast to rise sharply in 2015 and 2016," it added.

In October, Irish Finance Minister Michael Noonan predicted the country's economy to grow by 6.2 percent in 2015 and 4.3 percent in 2016. He said Ireland is on course to be the fastest growing economy in the euro zone for the second year in a row.

Ireland's economy grew at a rate of 5.2 percent last year.

But the Irish central bank said these developments in the Irish economy occur against a backdrop of an uncertain international macroeconomic and financial environment.

"Risks to the outlook in 2016 are marginally to the downside stemming mostly from a potential drag on external demand from persistent weaknesses in emerging market economies and its direct and second round effects on Irish exports," it said.

According to the central bank, both household and non-financial corporation debt remain high and the outlook for the global economy has weakened in this period.

"This leaves these sectors, and the wider economy, vulnerable to negative economic shocks and higher interest rates, and acts as a drag on consumption and investment," it said. Endit