Ireland sees GDP fall of just 2.5% in 2020, slower rebound in 2021

DUBLIN, Sept 29 (Reuters) - Irish gross domestic product is set to fall by just 2.5% this year and not the 10.5% estimated in April, Ireland’s finance ministry forecast on Tuesday, after the economy entered a far shallower recession than most of the euro zone.

While Ireland’s large multinational sector shielded its state finances from the worst of the COVID-19 crisis, the unemployment rate is still set to average almost 16% this year and then drop to 10.7% during 2021, the updated forecasts showed.

Modified domestic demand, a measure that strips out some of the ways large multinationals can distort Irish GDP, is forecast to fall by a steeper 6.5% in 2020, still far better than the 15.1% seen in April. The rebound in GDP and modified domestic demand in 2021 will not be as sharp as previously forecast. (Reporting by Padraic Halpin and Conor Humphries Editing by Gareth Jones)