DUBLIN, Aug. 20 (Xinhua) -- No new austerity measures will be required in the next budget for Ireland to hit its deficit target of less than 3 percent of gross domestic product (GDP), according to an Irish economist on Wednesday.
"We believe that the government can reach the hallowed ground of a sub 3 percent of GDP budget deficit in 2015 with no net additional austerity measures," said Goodbody Stockbrokers chief economist Dermot O'Leary.
Goodbody Stockbrokers is Ireland's longest established stockbroking firm with roots dating back to 1877.
In the firm's latest quarterly economic commentary, the Irish economist said that already announced water charges will bring in 500 million euros.
"This will leave scope for the government to focus on measures that improve medium-term growth capacity, including a reduction in the income tax burden and the reversal of some of the capital spending cuts of recent years," he said.
"The fiscal position would also benefit from refinancing 20 billion euros of IMF loans over the coming years, saving about 400 million euros per annum (0.2 percent of GDP) in interest costs."
Goodbody predicted Ireland's average GDP growth will be about 3.5 percent per annum over the next three years -- 3.5 percent this year, 3.6 percent in 2015 and 3.4 percent in 2016.
O'Leary said Ireland's cyclical recovery has recently gained momentum, leading to an upgrade to the economic forecasts.
"Stronger domestic demand trends, a rebound in exports and favorable statistical revisions all contribute to our improved estimates," he said.
Goodbody predicted the domestic demand will grow by 2.9 percent this year and 3.1 percent in 2015.
"We now believe Ireland will remain one of the fastest growing economies in the euro area over the next three years," he added. (1 euro = 1.33 dollars)