Written Answers. - Currency Fluctuations.
Bernard J. Durkan
Question:
111
Mr. Durkan
asked the
Minister for Industry and Commerce
if he expects recent or expected currency fluctuations to affect this country's trade in any way; if he will outline his views in this regard; the action, if any, he proposes to take which might be helpful to Irish interests; and if he will make a statement on the matter.
The only significant currency movement against the Irish pound in recent months has come from the weakening of sterling.
In so far as exports are concerned, the recent appreciation in the value of the punt against sterling, while obviously a matter of some concern, does not represent a serious threat to Irish exporters generally.
The competitiveness of Irish firms exporting to the UK has improved considerably in recent years as a result of lower inflation, lower interest rates, improvements in productivity and reductions in some important costs to industry such as electricity and telecommunications. Total Irish exports to the UK, in 1989, increased by approximately 13 per cent on the previous year's figure.
In addition, since up to 40 per cent of the raw materials used as inputs for our manufactured exports come from the sterling area, there have been reductions in the cost of raw materials, helping to offset some of the pressure on exporters to the UK.
There is no doubt, however, that in 1990 Irish exporters face a challenging year due to both the weakness of sterling and to more difficult market conditions. There has been a fall off in demand in the UK due to decline in consumer purchasing and this, coupled with the exchange rate position, will make the achievement of sales more difficult in 1990. Nevertheless, CTT are still projecting a further increase of the order of 5 per cent in the value of Irish exports to the UK in 1990.
The Government's pursuit of sound economic policies aimed at fostering a more competitive environment for Irish business and the availability of Córas Tráchtála's marketing support services remain, in my view, the most effective way in which the Government can assist exporters to compete in overseas markets.
As regards imports of consumer goods, the House will already be aware from my remarks in response to Deputy Quinn on 15 February that Irish consumers are already benefiting from the reduced costs.
