Dáil Éireann Debate, Thursday - 23 November 2023
57. Deputy Bernard J. Durkan asked the Minister for Enterprise, Trade and Employment the extent to which he continues to remain satisfied that any threats to enterprise, trade and employment continue to be adequately monitored in order to ensure provision is made insofar as is possible for both foreseen and unforeseen eventualities; and if he will make a statement on the matter. [51469/23]
View answer60. Deputy Bernard J. Durkan asked the Minister for Enterprise, Trade and Employment the extent to which any potential threats to employment in the context of the manufacturing, services and retail sectors have been identified or are identifiable, whether budgetary provisions are sufficient to meet any or all threats in this area; if he expects that all or most contingencies in respect of threats to either sector are adequately catered for; and if he will make a statement on the matter. [51470/23]
View answerI propose to take Questions Nos. 57 and 60 together.
As set out in Budget 2024, risks to the near-term outlook are tilted to the downside. The rise in interest rates, which the ECB does not expect to cut before Summer 2024, would be expected to dampen international economic growth rates. Given the open nature of the Irish economy, a slowdown in international growth may lead to more moderate rates of growth domestically. Cyclicality in demand can also have implications for sectoral economic growth - such as demand for pharmaceutical products which had seen significant growth during the COVID-19 pandemic and bolstered Irish exports during that period. As an open economy we are also aware of the risk which any rise in protectionism internationally presents.
Despite these risks Ireland’s economy has demonstrated substantial resilience over the past number of years and into 2023, reaching full employment during a challenging period for the global economy. With an unemployment rate of 4.8% in September, the Irish economy has been operating at a level close to full employment for quite some time. Irish GDP grew by 13.6% in 2021, and 9.4% in 2022, therefore, a moderation in economic growth might naturally be expected. A moderation in growth is also forecast in the Economic and Fiscal Outlook published as part of Budget 2024, which projects Real GDP growth of 4.5% for both 2024 and 2025.
Over the two-year period prior to Budget 2024 a total of €12 billion – 4½ per cent of national income – was provided in cost of living and doing business supports, comprising a mix of permanent and one-off measures, to absorb some of the impact and ease the burden of inflation on households and businesses. Budget 2024 contained a number of measures which will support businesses facing increased costs of doing business, including the Increased Cost of Business Grant will be targeted at Small and Medium sized businesses who operate from a rateable premises, with a total allocation of €250m and an extension of the 9% VAT reduction for gas and electricity until 31st October 2024, among other measures.
My Department continues to monitor sectoral economic activity and risks to this activity. However, no new measures are currently under consideration beyond what has already been announced. As with the supports which were provided to help businesses with rising inflation, there is a limit to how much direct support Government can offer firms to shelter them from international economic developments and associated risks.
The Government’s approach to enterprise policy continues to be guided by the priorities set out in the White Paper on Enterprise 2022-2030 – published in December last year. This review of Enterprise Policy was the first since 2018 and was motivated by an awareness of a changing enterprise landscape posing new challenges, including shifting patterns of globalisation driven by geopolitical change, disruptive technological innovation, and lagging productivity in parts of the indigenous sector of the economy.
