Economic growth will remain exceptionally strong next year before falling significantly in 2008 as the boost from SSIA accounts runs out, according to a report released today.
The analysis from Davy Stockbrokers predicts GDP and GNP grew by 5.5 per cent and 6.5 per cent respectively this year. For 2007 the report expects both equivalent figures to be 5 per cent, economists Robbie Kelleher and Rossa White estimate.
They also anticipate a higher rate of consumer spending growth next year - which they forecast will hit 7 per cent. Much of this increase will be as a result of €10 billion in maturing SSIA accounts due for release next year coupled with spending measures contained in the Budget.
The residential building sector is also expected to perform strongly again next year with 85,000 new properties expected to be built, a drop of 0.5 per cent from the 92,000 due for completion this year.
House completions are expected to ease further in 2008, dropping down to 82,000, according to Davy's.
The following year, 2008, is seen a payback time for the Irish economy with consumer spending expected to fall as the SSIA accounts are exhausted and the construction sector contracts.
It predicts GNP growth of 3 per cent for 2008.