Dáil Éireann Debate, Thursday - 16 January 2014
73. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this economy remains competitive when compared to other competing jurisdictions within the EU and without; and if he will make a statement on the matter. [2109/14]
View answerSubstantial progress has been made in terms of improving Ireland’s competitiveness in recent years. Relatively low consumer price inflation over the last five years has meant that Irish price levels have fallen considerably relative to our euro area peers. For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2009. This trend continued in 2013, with inflation over the first 11 months of the year coming in below the comparable rate in the euro area.
At the same time there has been a significant improvement in economy-wide cost competitiveness. Indeed, the European Commission recently forecast that our nominal unit labour costs will improve by 23 per cent relative to the euro area average over the period 2008-2015.
The real Harmonised Competitiveness Indicator (HCI) measures the trade weighted exchange rate for Ireland, adjusted for relative price developments. From mid-2008 to end-2013 Ireland's real HCI has fallen by 15 per cent, indicating a significant improvement in our competitiveness over the period and leaving Irish-based firms better equipped to compete on the international market.
