The Irish Department of Finance projects strong economic growth in fixed investment throughout 1998 supported by high levels of business confidence and low interest rates. Consumer spending is forecast to increase by 6.6 percent in 1998, and buoyant tax revenues have created a substantial overall exchequer surplus for the first six months of the year. Investment grew by approximately 11 percent, in volume terms, in 1997. Despite strong economic growth, Ireland's inflation rate remains low. Inflation rate averaged 1.5 percent in 1997 and is forecast at 2.9 percent for 1998.
Unemployment is the dark spot in the economic picture.
The long-term unemployed represent about 48 percent of the total. The overall outlook is good, however. Employment is expected to increase by 60,000 and unemployment to fall to under 9 percent by the end of 1998. Ireland's economic success shows no signs of waning in the near term, but there are certain issues of concerns that could threaten it. This could lead to rising labor costs.