Ireland's economy is expected to grow faster than previously thought over the next few years.
The Economic and Social Research Institute (ESRI) think-tank says GDP is expected to grow by 8.9% in 2018, followed by 4.5% growth in 2019.
But its latest Quarterly Economic Commentary says their forecasts for 2019 "are subject to the technical assumption that an agreement along the lines of the European Economic Area will exist between the UK and the EU after March 2019."
However the report warns that the housing crisis and Brexit are the main factors that threaten to damage economy.
Strong GDP growth and declining unemployment rates are set to continue into 2019, according to the ESRI’s latest forecast. https://t.co/88P43pQ1pg #ESRIpublications pic.twitter.com/lDNLvlHFJY
— ESRI Dublin (@ESRIDublin) September 26, 2018
It says the most substantial risk facing the economy is the outcome of the Brexit negotiations.
"If a no-deal Brexit were to materialise in March 2019 the economy could be confronted by a highly adverse economic shock.
"Either way, given the strong pace of current economic activity and the possibility of a highly adverse shock, a neutral budget is the optimal policy choice at this point."
"The summit of European Union leaders in October may provide some clarity concerning the nature of the UK withdrawal, however at this stage it is prudent to assume that a no-deal outcome is a real possibility.
