The Republic's economy will continue to grow strongly over the coming 15 years as the population reaches 5.3 million by 2020, research published yesterday has found.
In its latest forecast on demographic trends and the economy, entitled 2020 Vision, Ireland's Demographic Dividend, economists from NCB stockbrokers forecast that population and productivity growth will underpin economic growth of 5 per cent over the next 14 years, supporting strong demand across a range of spending categories.
Based on earlier predictions from the Central Statistics Office (CSO), NCB also forecast that by 2020 almost one in five of the population - close to one million people - will be migrants. The total population is forecast to reach six million by 2050. The Republic's present population is 4.04 million.
The Labour Force - the number of persons available for work - will rise by 2.2 per cent each year over the next 10 years. The economy will sustain productivity growth - growth in the potential output per worker - of close to 3 per cent. Potential growth in the economy will remain at 5.75 per cent until 2010, the report says, but population ageing and lower productivity growth will slow this rate to 5 per cent and 4 per cent in the two following five year periods.
NCB chief economist Dermot O'Brien said: "A growing population implies a growing domestic customer base. This influence will be at its strongest in the next 10 years. Between 2005 and 2010, this on its own will contribute growth in household spending of almost 3 per cent in real terms on an annual basis."
The forecasts assume a continued rise in the trend in total births up to 2014, as well as a rise in life expectancy to 79.5 years for males and 84.1 years for females by 2020. The authors expect net inward migration to average 53,000 in the coming five years, before falling to 25,000 by 2020.
"The rise in the immigrant population accounted for 30 per cent of the total increase in the population between 1996 and 2002. We estimate it may account for as much as 50 per cent of the growth in the total population between now and 2020," the report says.
As a result of population growth, the number of houses is expected to continue growing by around 65,000 units a year until at least 2020, while the number of cars in the State will have doubled by then to three million. Growth in population will also boost demand for pension products, travel, leisure activities and entertainment, the authors say.
But growth will eventually slow due to population ageing. "The median age of the population will increase from around 33 years now to 38 by 2020 and 46 by 2050. Over 65s will account for 29 per cent of the population, or about 1.7 million individuals, by 2050 compared with 11 per cent currently."