DUBLIN, June 22 (Xinhua) -- Irish economic growth is set to remain solid in 2017 and 2018, said a think tank in Ireland Thursday.
In its latest quarterly economic commentary, the Dublin-based Economic and Social Research Institute (ESRI) said Irish gross domestic product (GDP) is now projected to grow by 3.8 percent in 2017 and 3.6 percent in 2018.
Ireland's economy has been among the best-performing in Europe since the end of the financial crisis. Last year, the economy grew by 5.2 percent.
The ESRI attributed the growth to strong domestic demand in the country, saying that improving household balance sheets and falling unemployment are expected to support solid consumption growth over the forecast horizon.
It added the expansion in underlying investment activity, particularly construction, looks set to continue into 2017 and 2018, according to a variety of indicators.
The think tank said the improvements in the labor market appear to be quite broad, both regionally and by sector, with almost all sectors registering employment growth.
It predicted the unemployment rate is expected to average 6.1 percent in 2017 and 5.4 percent in 2018.
But the ESRI warned Brexit will continue to pose a substantial risk for the Irish economy.
New calculations presented in the quarterly economic commentary suggests that a hard Brexit could have significant implications for the fiscal space available in the budgetary process.
"The state of the public finances and the performance of different taxation headings in particular have been significantly less robust in the present year," it said.
"Apart from VAT receipts, most other tax headings either display weak growth or substantial declines; excise duty, capital gains and capital acquisitions receipts have all shown double digit declines with respect to the same time last year," it added.
The ESRI said a hard Brexit would reduce Irish potential output by more than 3 percent over the medium term.
