Central Bank revises down housing and growth forecast
The Central Bank is revising downwards its forecast for how many homes will be built this year and over the following two years.
It expects 32,500 will be finished this year, a reduction of 1,500 on its previous forecast last March.
It says 37,500 will be completed next year, down 2,500 from its last projection, and 41,500 will completed in 2027, down 2,500.
It would mean the Government would miss its targets for house completions each year.
The Central Bank says the reasons for the downward revision is that completions of homes are below expectations in the first three months of the year, while commencements "dropped sharply".
The housing projections are "subject to considerable downside risk given the current bottlenecks in housing supply and infrastructure," according to the bank.
The Central Bank highlights a lack of water and electricity connections and a shortfall of construction workers as key challenges for increasing construction.
It says increasing productivity in the sector is "essential to enable it to fulfil the increasing demand for housing".
The bank is also downgrading its forecast for growth for the domestic economy for this year and next year due to US tariffs.
It expects the growth, as measured by modified domestic demand, will be 2% this year, a drop 0.6 percentage points on the previous projection.
It has reduced its forecast for next year by 0.4 percentage points to 2.1%.
While the outlook for the domestic economy is down, the expectations for gross domestic product, which includes the impact of multinationals, is being raised due to a surge in exports to the US ahead tariffs being imposed by the Trump administration.
This is largely being driven by a rise in the export of weight loss and diabetics drugs produced by the pharmaceutical sector in Ireland.
Robert Kelly Director of Economics and Statistics at the Central Bank says: "with the global economic backdrop continuing to shift, there is heightened uncertainty on the outlook for the Irish economy."
The bank examines the threat to the public finance from a collapse in the windfall corporation tax receipts collected by the State.
It finds that in a severe scenario, there would be a €17bn deficit by 2030.
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