Bernard Durkan (Kildare North, Fine Gael)
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300. To ask the Minister for Finance the extent to which economic competitiveness has been improved in the economy; and if he will make a statement on the matter. [24395/13]

Michael Noonan (Limerick City, Fine Gael)
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After three successive years of contraction, the Irish economy returned to growth in 2011 and achieved a second successive year of growth in 2012. GDP is projected to further increase by 1.3 per cent this year.

The recovery of the Irish economy will continue to be led by the exporting sector which is forecast to grow by 2.3 per cent in 2013. This, in no small part, will be aided by the improvements in price and cost competitiveness in recent years which are expected to continue into 2013.

As a small, open economy that relies on trade and foreign direct investment, Ireland’s competitiveness is a particularly important factor in providing economic growth and jobs. The Government continues to take steps to support Ireland’s competitiveness. This includes the Government’s commitment to the 12½ per cent rate of corporation tax and to maintaining and enhancing our pro-business environment. As a result, Ireland continues to attract inward foreign direct investment with the highest net job creation from this investment in a decade recorded last year.

Labour costs in Ireland, relative to those in our main competitors, have improved substantially in recent years and are forecast to continue improving in the coming years. For instance, the European Commission is forecasting that Ireland’s nominal unit labour costs will have improved by 23 per cent relative to those in the euro area over the period 2008-2014.

Consumer prices are continuing to register modest increases in line with the pattern over the last few years. The headline HICP rate of 0.5 per cent recorded in April is the lowest in over two years. Five years of inflation at or below the euro area average is continuing to contribute to competitiveness gains.

Finally, strengthening competitiveness also involves implementing measures in other areas that have an effect on productivity. Accordingly, the Government is continuing to implement a range of structural reforms across all sectors of the economy.