Market Pulse Report Q3 2021 - Fitzgerald Power

GDP projections

The Department of Finance is expecting GDP to increase by 15.6% this year, although a lower estimate of 5.25% was also provided. The department has pointed to an economic recovery taking hold more rapidly and has cut its unemployment rate forecast to 7.2% for next year, from 8.2% previously.

Economic trends

Ireland’s economic performance has improved substantially over the quarter, with thousands exiting the live register, investment in property increasing, and the services sector recording its strongest quarter since 2006. Increased savings mean consumers are spending more, and the export sector has continued to perform above expectations.

Energy

Energy prices are expected to increase over the winter due to a combination of lower supply of gas than expected, more coal taken off the grid, poorer than expected wind generation, and increased consumer demand.

Rising prices

Inflation was up across the Eurozone by 3.4% in September, reaching a new 13-year high. Economists expect the increase in inflation to be transitionary, due to pent up demand for goods and post-Covid supply chains needing time to adjust. As shown later in this report, energy prices and inflation continue to be a major concern for businesses this quarter

Vaccinations

As of Wednesday 30th September, 7.21 million vaccine doses had been administered in Ireland, meaning 90.1% of those over 12 had received at least a first dose. This equals 3.04 million doses administered in Q3.