Dáil Éireann Debate, Thursday - 23 November 2023
127. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which Ireland’s economy continues on a stable footing notwithstanding any potential threat; and if he will make a statement on the matter. [51468/23]
View answer185. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that this country’s economy remains on a solid footing, notwithstanding the various challenges; and if he will make a statement on the matter. [51759/23]
View answerI propose to take Questions Nos. 127 and 185 together.
Despite large and unprecedented economic shocks in recent years, the domestic economy has proven to be remarkably resilient. This resilience is most clearly illustrated by the strength of the labour market, where the unemployment rate averaged 4.5 per cent in the third quarter of this year.
Indeed, government supports to date have clearly played a key role in maintaining growth in the domestic economy. By responding swiftly and decisively to the cost of living challenges, government has helped to mitigate the impact of inflationary pressures on both businesses and households. Looking ahead headline inflation is expected to continue to moderate in the months ahead as the war-induced energy price shock is reversed and lower wholesale prices are passed onto retail prices. As demand cools and supply catches up, core inflation is also set to moderate, although at a slower pace than headline inflation.
Although our economic position remains strong at present, government is fully aware that significant challenges remain on the horizon, not least in terms the weak state of the global economy, the ultimate impact of monetary tightening and capacity constraints in our housing and labour markets.
The measures taken as part of Budget 2024 will continue to support improvements in domestic living standards while, at the same time, laying the foundations for sustainable economic, fiscal, environmental and social growth into the future.
My Department forecasts growth in the domestic economy both this year and next year of 2.2 per cent. However, risks to the near-term outlook remain two-sided in nature, although tilted to the downside. It is possible that the ongoing wars in Ukraine, the middle-east and other geopolitical tensions could escalate or broaden to other countries, increasing uncertainty and further weakening economic activity amongst our main partners.
