Stabilising inflation will lead to real wage growth – ESRI [Video]

Moderate growth, lowered inflation and a return to real wage growth are all predicted for the domestic Irish economy in the Economic and Social Research Institute’s (ESRI) quarterly economic commentary.

A positive international environment, quicker-than-expected disinflation, potential interest rate declines and a robust labour market are all cited as reasons for an expected realignment between headline indicators and measurements for domestic performance.

The ESRI expects GDP, albeit heavily influenced by the MNE sector, to grow by 2.5% this year and 3.2% in 2025.

The more accurate modified domestic demand (MDD), which discounts multinational contributions, is predicted to grow by a more moderate 2.2% and 2.9% in 2025, being hamstrung by lower levels of investment.

Inflation is expected to continue its decline, with the Harmonised Index of Consumer Prices (HICP) inflation being lower than other comparable European countries. The think tank expects HICP inflation to increase by 2% in 2024 and drop below 2% in 2025.

Rising nominal wages and stabilising inflation is likely to see real …