Dáil Éireann Debate, Thursday - 28 February 2019
64. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he continues to monitor the economic situation arising from unsettled international trade conditions and notwithstanding Brexit; and if he will make a statement on the matter. [10200/19]
View answerI regularly monitor the latest economic developments. My Department continually analyses and prepares briefing on short and medium term macroeconomic trends in European and international economy. This includes informing me of the latest forecasts of the global economy and of our key trading partners from the international institutions.
The Economic and Fiscal Outlook published with Budget 2019 identified a number of external risks relating to trade disruptions and Brexit. My Department’s latest macroeconomic outlook, including the external risk assessment, will be contained in the Stability Programme Update which will be published in April.
At European level, through both the ECOFIN and Eurogroup meetings, ministers work alongside the European Commission and the European Central Bank (ECB) to take stock of the latest economic situation, including the risks to the European economy’s growth prospects.
The latest forecasts from the international institutions show a sharp deterioration in the external environment. There are strong indications that the global economic expansion, underway since 2016 and for longer in the EU and the US, has peaked. Momentum in the global economy has been slowing since the second half of 2018. Global GDP growth is projected to ease gradually from 3.7 per cent in 2018 to around 3½ per cent in 2019 and 2020.
Short-term indicators are pointing to a slowdown in the pace of growth. This reflects continuing risks relating to Brexit, tighter global financial conditions, geopolitical tensions and trade protectionism.
Escalating trade conflicts are negatively affecting the growth outlook in all countries. Indicators such as trade volumes, industrial production and manufacturing purchasing managers index (PMIs) are all declining. The key issue for Europe and the world economy is to safeguard the open, rules-based, global trading system which has been associated with raising living standards throughout the world.
Ireland, as a highly open, export focussed, economy is particularly sensitive to a slowdown in world trade and overall economic growth. The slowing world growth momentum and the implications for Ireland’s economy, underline the importance of improving the resilience of the economy by building fiscal buffers and focussing on competitiveness.
