Bernard Durkan
Question:234. Deputy Bernard J. Durkan asked the Minister for Finance how he sees this country’s economy progressing and comparable to other EU economies; and if he will make a statement on the matter. [4873/24]
View answerThursday, 1 February 2024
Questions (234)
Written answers
The Irish economy has proven to be remarkably resilient, despite the large and unprecedented shocks faced in recent years. This resilience is most evident in the strength of the labour market, with the level of employment reaching an all-time high in the third quarter of last year. Modified domestic demand (MDD) – my preferred measure of the domestic economy - recorded modest growth of 0.8 per cent in the first three quarters of 2023 compared to the same period in 2022, supported by solid growth in consumption bolstered by full employment and government supports.
GDP in the EU and euro area was somewhat subdued in 2023, both growing by ½ a per cent compared to 2022. Of note, the single market’s largest economy, Germany, registered a contraction of -0.3 per cent in 2023.
The outlook for the domestic and European economies remains uncertain, and the Government is conscious of the challenges on the horizon. In the most recent OECD forecasts in November, projected MDD growth was revised down to 1.7 per cent in 2024, while the forecast for euro area GDP was revised down to 0.9 per cent.
Although headline inflation was generally on a downward trajectory throughout last year, persistent core inflation continues to be a risk. The related tightening of monetary will act as a headwind going forward, and the full impact of the tighter monetary policy stance is still uncertain. However, the Irish economy is facing into this year from a relatively strong economic position, and my Department will continue to monitor the risks to the Irish economic outlook.
My Department will publish updated macroeconomic forecasts in the spring.