The latest Quarterly Economic Outlook from IBEC has predicted Ireland’s GDP will grow by 1.8% in 2013.
The group said that 2013 is likely to be the turning point for the domestic economy, as businesses reinvest in their operations and consumers start to see income increases.
IBEC said that as Irish households gain the same level of confidence in Ireland's prospects as outside investors, recovery will gain momentum and 2013 will see employment in the private sector begin to grow again.
The Quarterly Economic Outlook estimates that Irish GDP expanded by 1.2% last year (4% in terms of value), making Ireland the second fastest growing eurozone economy in 2012, behind only Slovakia. IBEC forecasts GDP to grow at 1.8% this year and for the recovery to gain further momentum in 2014.
IBEC expects the Consumer Price Index to increase by an average of 1.5% this year and estimates inflation of less than 2% in 2014.
The group is also predicting that 2012 will be the last year of falling employment, with a return to marginal growth of 0.4% in 2013. Commenting on the Quarterly Economic Outlook, IBEC Chief Economist Fergal O'Brien said: “The economy performed better than many predicted last year. Exports had another record year and a number of indicators suggest the domestic economy has stabilised and is poised to recover.
"Although many Irish households continue to grapple with debt and unemployment, there is growing evidence that 2013 could be a turning point for the domestic economy. We are edging towards a deal on Irish bank debt, which could provide a much-needed boost in consumer sentiment. Last year mortgaged households experienced an improvement in their purchasing power of about 3%, as incomes stabilised and mortgage costs fell. While the property tax will put a further pressure on households, interest rates are set to remain very low and there will some increases in incomes.”