Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Under the European Central Bank, ECB, expanded asset purchase programme, often referred to as quantitative easing, QE, the eurosystem, comprising the ECB and the national central banks of the euro area, has been purchasing €60 billion of public and private assets per month and plans to do so until at least March 2017, or until inflation returns to levels consistent with price stability, defined as inflation close to 2%. Purchases of sovereign debt began on 9 March 2015.

While it is difficult to estimate directly the beneficial impact of QE on growth rates here since this policy began, it is nevertheless clear that QE has boosted nominal growth, and this is one factor behind the strong tax and general Government revenue growth in 2015.

Assessing what the final impact to the Irish economy will be by the time the QE programme concludes is also difficult to estimate at this stage, not least because of the contingent nature of the end date. The ECB has stated that QE will conclude only when euro area inflation returns to levels consistent with price stability. This outcome will help businesses across Europe to enjoy better access to credit, boost investment, create jobs and thus support overall economic growth, which should offset the impact of withdrawing QE. Thus, by helping to create jobs and supporting overall economic growth in all euro area countries, including Ireland, the withdrawal of QE will signal the resumption of more normal growth activity in the euro area.

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