Market Pulse Report Q3 2022 - Fitzgerald Power

The Irish Economy

The ESRI expects Irish growth to remain strong over 2022, with Modified Domestic Demand (MDD) expected to grow
by 7.5% this year. However, growth is expected to decline in 2023, with inflation forecast to average 8.1% in 2022 and
6.8% in 2023.

Energy Crisis

Although energy prices have increased, in part due to a decline in Russian gas supply, better than expected weather
across Europe, substitution to different energy sources, and a change in both personal and industrial behaviour, has meant the energy crisis has not yet materialised to the extent feared.

Global Economic Trends

Global growth is forecast to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023, as economic activity is experiencing
a sharper than expected slowdown. The IMF expects global inflation to rise from 4.7% in 2021 to 8.8% in 2022 but to decline to 6.5% in 2023 and to 4.1% by 2024.

Rising Prices

Inflation in the Eurozone rose by 9.9% year on year in September, with energy prices remaining the biggest contributor to accelerating prices, rising 40.8%. Core inflation, which excludes volatile factors such as energy, food, alcohol and tobacco, increased year on year by 6%.

British Budget

The markets reacted strongly against a mini budget introduced by the new Conservative government in the United Kingdom, which was expected to increase the national debt by cutting taxes and increasing spending. The pound slumped to a 37 year low against the dollar in trading, forcing the UK government to row back on the budget.