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Economic Data

Dáil Éireann Debate, Thursday - 14 February 2019

Thursday, 14 February 2019

Questions (68)

Bernard Durkan

Question:

68. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which recovery from the economic crisis continues; if specific issues are likely to impact on the progress; and if he will make a statement on the matter. [7618/19]

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Written answers

The strong growth recorded over the last number of years has enabled the Irish economy to move from a stage of recovery to a more mature stage in the economic cycle. Importantly growth in the economy has become more broad based in recent years, with both domestic demand and net exports making positive contributions to growth. The latest data from the CSO shows that modified domestic demand increased by over 5 per cent on an annual basis in the first three quarters of 2018.

Arguably, the best indication of the recovery in the economy has been in the labour market, with employment increasing by 3 per cent on an annual basis in the third quarter of 2018. As a result there are now more people working in Ireland than ever before. In parallel, the unemployment rate has fallen a peak of 16 per cent in early 2012 to 5.3 per cent in December 2018.

As I outlined in Budget 2019, the economy is expected to continue to grow strongly over the coming years, with GDP forecast to grow by 4.2 per cent this year and 3.6 per cent in 2020. This in turn will be reflected in the labour market, with the creation of an additional 62,000 jobs in 2019.

Despite this positive outlook, the risks to our economy are numerous and primarily external in nature. First and foremost is the potential fallout from a more adverse-than-expected outcome from Brexit. Secondly, given Ireland’s position as a small open economy with a high degree of integration in global value chains, any further escalation in trade protectionism or a slowdown in global growth would have a disproportionate impact on the Irish economy. In addition, a faster-than-expected normalisation of monetary policy, changes in other jurisdictions that affect the competitiveness of Ireland’s corporate tax regime and rising geopolitical uncertainty all have the potential to undermine growth in the economy.

As a number of these factors are beyond our control, the best way we can mitigate against them is through prudent budgetary policy, careful management of the public finances and by focusing on competitiveness-oriented policies. That is what this Government has done and will continue to do.

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