Gross national product (GNP) rose 13.4 per cent in April-June compared with the same quarter the previous year.
Speedy growth indicated by new Central Statistic Office figures yesterday was underlined by the Central Bank, which said mortgage lending last December was 24 per cent stronger than a year earlier. This compared with a slightly higher rate of 25 percent recorded in November. Irish Intercontinental Bank said the GNP figure greatly overstated the economy's true performance. Its chief economist, Mr Austin Hughes, said: "We expect growth to moderate substantially in the second half of the year to produce an outturn for the year as a whole in the region of 10 per cent.
He added: "In view of the emerging downswing in the US, we have also pared back our forecast growth in 2001 to 6.5 per cent."
Bloxham Stockbrokers predicted gross national demand growth of 10-10.5 per cent for 2000. Its economist, Mr Alan McQuaid, said: "The buoyant growth figures reflect the continuation of very strong demand growth within the economy combined with robust external demand.
"However, the economy's capacity to respond to increases in demand is diminishing as labour shortages become more widespread and pressure on the economic infrastructure increases."
The chief economist at NCB Stockbrokers, Mr Dermot O'Brien, said slowing sales in the IT sector and weaker growth in Europe will offset strong domestic demand this year.
The Central Bank mortgage figures were adjusted to take account of the increase securitisation of loan books by the main financial institutions. This was the first time the bank made this adjustment to figures which would otherwise be lower as a result of securitisation. By securitising their loan book the banks effectively remove mortgages off their balance sheet by putting it into marketable securities.
It said the annual growth rate was generally steady at around 25 per cent from May 1999 to December 2000. Residential mortgage lending to Irish residents rose by €599 million, or 2.1 per cent, in December.
Lending by credit institutions increased by €505 million or 0.5 of a percentage point in December to £111 billion. This compared with an increase of more than €2 billion, or 2.3 per cent in December 1999.
