Quarterly Bulletin No.2 2017

Read the QB2 2017 Forecast Summary Table.

Read the full Comment for Quarterly Bulletin No.2 2017.

Tá leagan Gaeilge den Timpeallacht Gheilleagrach ar fáil anseo.

Irish GDP is forecast to grow by 3.5 per cent this year following estimated growth of 5.2 per cent in 2016. Domestic demand components (consumption and investment) are set to remain the main drivers of growth. Risks to the outlook for the economy remain weighted to the downside and mainly relate to Brexit-related vulnerabilities.

Read the full chapter: The Irish Economy.

Irish-resident private sector deposits increased by 1.4 per cent over the year to January 2017. The strong deposit inflows recorded from non-financial corporations (NFCs) continued, but the growth in household deposits has moderated slightly in recent months.   Financial indicators for the household have been strong in recent months, which has resulted in an improvement in debt sustainability metrics. Irish households reduced debt as a proportion of disposable income more than any country in European Union (EU) over the past year. 

Read the full chapter: Financing Developments in the Irish Economy.

This study shows that borrowers aged 35-50 in Ireland have higher debt levels than similar households in the UK, Euro Area or USA. Largely due to Tracker mortgages and longer loan terms, mortgage borrowers in Ireland have loan repayment to income ratios in line with households in comparator countries. Future interest rate increases will increase repayment burdens. This may be mitigated by income growth.

Read the full signed article: The Balancing Act Household Indebtedness Over the Lifecycle.

The financial crisis demonstrated the damaging effects that the build-up of risk in the financial system can have. However, due to the complex and constantly evolving nature of the modern financial system, monitoring this risk is not a straightforward task. One approach taken by the Central Bank centres on the use of a broad range of indicators. These indicators are categorised by type of risk and their usefulness is further enhanced by establishing indicator values associated with elevated risk levels and through the use of visualisation methods, such as heatmaps.

Read the full signed article: The Role of Macroprudential Indicators in Monitoring Systemic Risk and Setting Policy.

With the aim of understanding key connections in the Irish banking system and to identify the build-up of potential systemic risks, the article describes TARGET2-IE, Ireland’s component of the Eurosystem’s large value payments system. The article presents, for the first time, a topological view of the customer and interbank payment flows involving Irish banks. Further, by utilising network analysis, practical indicators for identifying connections between banks and for monitoring payment inflows and outflows over time are presented.

Read the full signed article: Monitoring Ireland’s Payments using TARGET2.

Read the full Statistical Appendix.