The Central Bank has published its third Quarterly Bulletin of 2022. On the launch of the Quarterly Bulletin on 7 July, 2022, Central Bank Acting Deputy Governor Mark Cassidy said: “The economy was in a good position at the start of the year, having shown considerable resilience through Covid.
However, the demand recovery from the pandemic has been tempered by the effects of the Russian invasion of Ukraine and persistent supply chain challenges. Whilst positive economic growth is still expected in 2022, higher prices and costs are already impacting negatively on households and firms.
Households’ real incomes and purchasing power are expected to fall in 2022, before recovering over the following years. Relatedly, domestic consumption and investment are expected to grow at a slower pace this year and next than previously expected. Uncertainty around the medium-term outlook remains high; however, the expectation is that inflation will start to decline during the second half of this year.”
Highlights
- Growth in modified domestic demand growth is still expected in the coming years, but forecast has been revised down to 4.3% in 2022, 4.2% in 2023 and 3.8% in 2024
- Consumer price inflation has been revised up to 7.8% this year, due partially to further increases in energy prices, moderating to 4.2% in 2023 and 2.1% in 2024
- Expectation is that inflation will start to decline during the second half of this year