Growth predictions to rise following boom in exports

Economic growth which is significantly ahead of expectations is being predicted following the publication of figures yesterday showing a huge increase in exports.

The latest Central Bank estimate for growth in GDP for 2000 is 10 per cent, but this could be exceeded by 2 to 4 per cent if exports for the year as a whole mirror performance to date, according to Dr Dan McLaughlin, chief economist with ABN Amro.

Figures showing that exports to non-EU countries in the six months to June have increased by 44 per cent came as the International Monetary Fund (IMF) issued its most favourable report to date on the Republic's economy.

The IMF said the adverse effects on competitiveness of higher wage and price inflation "have been outweighed by Ireland's relatively strong productivity growth in the tradable goods sectors and the weakness of the euro".

Short term prospects are for continued buoyant growth, according to the report.

The value of exports to non-EU countries was £11,736 million (€14,901 million) in the first six months of the year, the Central Statistics Office (CSO) said yesterday. Imports for the same period increased by 21 per cent, to £7,781 million.

Exports to non-EU countries currently comprise approximately 40 per cent of overall exports. Figures for overall exports in the first six months are not yet available but the results are now expected to be significantly ahead of previous expectations.

The rise in exports is due in the main to increased sales to the US and Japan, with the main products being organic chemicals and computer equipment.

Organic chemicals, exports of which increased by 112 per cent to £3,681 million, or more than 30 per cent of all exports to non-EU countries, comprise finished or partly processed products made by pharmaceutical companies. The export to the US of product from the Pfizer plant in Ringaskiddy, Co Cork, used to make the impotency drug Viagra, makes for a significant part of overall exports of organic chemicals.

A 42 per cent increase in exports of computer equipment to £2,119 million, is reflective of the new operations based here by IT multinationals, Dr McLaughlin said. A relatively small investment decision by one of these companies can have a large impact on exports. "What these figures are partly telling you is that Ireland is the silicon valley of Europe."

Exports to the US increased by 60 per cent to £5,773 million, while exports to Japan increased by 73 per cent to £1,202 million. Between them the two markets accounted for just under 60 per cent of all exports to non-EU countries in the first six months.

The rise in imports includes significant increases in such categories as computer equipment and electrical machinery, reflecting imports by multinationals of raw materials for products which are then exported. However, road vehicle imports are up more than 30 per cent.