IBEC thinks Ireland's economy will avoid a Brexit shock in 2016

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Irish business group IBEC has predicted that the Irish economy will weather the effects of the uncertainty created by the results of the Brexit referendum and that the country will deliver growth of 3.9% this year and 3.2% in 2017.

Although the Quarterly Economic Outlook adds that the outlook for 2017 is "much more uncertain." It states that export businesses face greater uncertainty following a series of currency swings after the Brexit vote.

IBEC is also calling for "more flexibility" concerning the EU's fiscal rules as it says that Ireland "urgently needs" investment in infrastructure.

Following a strong performance in the first half of this year, the group expects employment growth of 2.8% in 2016, and growth in consumer spending of 4.9%.

Brexit, Ibec Director of Policy Fergal O'Brien said: "The exporting industries most affected by the sterling fall are typically jobs intensive and deeply embedded in local economies. This adds to the risk that some parts of the country will be disproportionately hit.

"Already regional employment performance is mixed. 'The West' (Galway, Mayo, Roscommon) has experienced a considerable lag over the past four years compared to other parts of the country. Budget 2017 must include a series of tax reforms along with targeted investment to support balanced growth and job creation across the entire country."

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