Growth could still reach 5% in 2005 - Davy

Ireland is back on track to become the euro zone's fastest growing economy due to a pick-up in activity in the second quarter…

Ireland is back on track to become the euro zone's fastest growing economy due to a pick-up in activity in the second quarter, according to analysis by Davy stockbrokers.

Davy forecasts that second-quarter GNP growth may have reached 5 per cent, about a percentage point better than in the first quarter, keeping the economy on target to meet 4.5 to 5 per cent full year growth rate.

According to Davy's economist Rossa White, the second quarter saw increased Government and consumer expenditure as well as higher investment in machinery and equipment.

Mr White added that the weakness in the export sector witnessed in the first quarter has dissipated and traded sector is expected to make a positive contribution to growth in the second quarter.

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A 5 per cent growth rate would make Ireland again the fastest growing euro zone economy with a growth rate at least three percentage points faster than the euro area average, according to Mr White.