Central bank revises up Ireland's 2016 GDP growth forecast

The Central Bank of Ireland on Friday revised its forecast for the country's 2016 GDP (gross domestic product) growth to 5.1 percent instead of the previously estimated 4.8 percent rate, citing the continued strength of demand within the economy.

In its latest quarterly bulletin, the central bank said the forecast for GDP growth in 2017 is 4.2 percent, down 0.2 percent from the previous forecast.

"The main impetus to growth in 2016 and 2017 is projected to come from the continued strength of demand within the economy in the form of solid growth in consumer spending and investment," it said.

The strengthening of economic growth over the past year has been underpinned by relatively strong and broad-based growth in employment, it added.

It also said the improvement in the labor market, which has probably been the most important factor in driving the recovery in recent years, has been particularly marked, with average annual employment growth of over 2 percent since 2012.

Gabriel Fagan, the central bank's chief economist, said the growth outlook is relatively favorable and domestic economic momentum is strong, although there are some risks to the outlook from external factors.

"The main driver of growth will be the continuing recovery in employment and incomes, although following its very strong growth in recent years, employment growth is projected to gradually moderate over the forecast horizon," he said.