Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The strong performance of the economy is expected to continue over the short run. As part of budget 2018, my Department is forecasting real GDP growth of 4.3 % for this year and 3.5% for next year. The benefit of this growth will be felt in the labour market, with an additional 48,000 jobs projected to be created next year.

Recent economic indicators have generally been positive. Real GDP grew by 5.8% in the second quarter of this year on an annual basis. This follows annual growth of 5.2% in the first quarter. While headline GDP figures can be exaggerated in an Irish context, other indicators such as employment, unemployment trends and taxation receipts confirm the strong recovery. 

Employment growth remains strong with an annual rate of 2.4% recorded in the second quarter of 2017, representing the creation of more than 48,000 additional jobs over the year. The increase in employment remains broad-based, with gains recorded in 11 of the 14 sectors reported by the Central Statistics Office, CSO. The continued growth in employment has seen the unemployment rate fall from more than 15% in 2012 to 6.1% in September 2017.

However, a number of risks are present, including the UK’s decision to exit the EU and the possibility of significant tax reform in the US. In addition, the sharp appreciation of the euro rate against sterling is posing significant challenges, particularly for traditional sectors such as the tourism sector and areas sensitive to cross-Border trade. These sources of uncertainty highlight the importance of careful management of the public finances and of competitiveness-oriented policies that improve the resilience of the economy.

In summary, I am satisfied that the economic indicators remain stable and that our economic fundamentals are strong, although the level of uncertainty remains elevated. In this regard, it is critical that appropriate polices are implemented and that is what the Government will continue to do.

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