DAVY VIEW

We have revised up our GDP forecast to 4.8% in 2021 (3.8% previously) and 5.5% in 2022 due to buoyant exports and multinational sector output. In contrast, fresh COVID-19 restrictions will depress activity in H1 2021, delaying the recovery. We expect consumer spending (5.2%) and employment (5.9%) to see a partial rebound, with the government balance narrowing to €18bn, 4.6% of GDP, in 2021. House prices will rise by 3% this year with mortgage lending rebounding to €9.5bn.