Dáil Éireann Debate, Tuesday - 21 May 2024
231. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that economic progress continues in line with expectations and best practice; and if he will make a statement on the matter. [22981/24]
View answerDespite facing a number of economic headwinds over recent years, the available evidence suggests the economy is in reasonable shape, at least in aggregate terms.
The brightest spot in the Irish economy is undoubtedly in the labour market. At the end of last year, well over 2.7 million people were in employment – a record level. As a result, the unemployment rate has remained low over the last year or so, consistent with any measure of full employment.
Just like most other advanced economies, Ireland has had to grapple with the effects of significant cost of living pressures, with inflation peaking at just below 10 per cent in mid-2022. Throughout this period of high inflation, the Government has been at the forefront in supporting the most vulnerable. By responding swiftly and decisively to the cost of living challenges, the Government has helped to mitigate the impact of inflationary pressures on both businesses and households. The temporary and targeted nature of the measures taken by Government were designed to avoid adding to the inflationary burden whilst providing support to those most in need.
Fortunately inflationary pressures are now abating, with the latest data showing inflation had fallen to just 1.6 per cent in April, Its lowest rate since mid-2021. Ireland now has one of the lowest rates of inflation in the Euro Area. Looking ahead, my Department anticipates inflation to average around 2 per cent in the coming years, in other words, in line with price stability. Against this backdrop, the domestic economy is expected to experience a pick-up in activity in the early part of the year, with growth then accelerating as the year progresses.
Despite our economic position remaining strong at present, we are nevertheless living through a time fraught with uncertainty. Conflicts around the world, the escalation of geopolitical tensions, a new era of subsidies and tariffs and the fragmentation of global trade could all have knock-on implications for the Irish economy. Whilst we cannot prevent external shock from occurring, we can ensure that we are on the best possible footing to respond to these shocks when they do occur. With this in mind, Government will continue to strike a balance between ensuring that spending is sufficient to meet the needs of today without compromising the future needs of our people in the years to come.
