The Irish economy is set to grow by 4.2 per cent in 2021, in spite of stringent measures introduced early in the year due to the Covid-19 crisis, according to the OECD. And it will rise by 5.1 per cent in 2022 on the back of pent-up consumer spending.
The Organisation for Economic Co-operation and Development had previously forecast 3 per cent growth this year in an analysis published in late December.
The OECD said the economy is poised for a strong recovery with a marked rebound in spending driven by savings that have been accumulated by households during lockdown.
The forecast is included in a new report in which the OECD says the global economic outlook is improving as vaccine rollouts allow businesses to resume operations and as the US pumps trillions of dollars into the world’s largest economy.
The global economy is now set to grow 5.8 per cent this year and 4.4 per cent next year, said the OECD. The organisation raised its estimates from 5.6 per cent and 4 per cent respectively in its last forecasts released in March.
Looking at the Republic, it said the easing of Brexit-related uncertainties has improved the business investment outlook. But it said investment will likely remain below its historically high levels in 2019.
The OECD said short-term frictions in the Brexit agreement’s implementation could still dampen momentum. It also said rising house prices should support residential investment.