Bernard Durkan (Kildare North, Fine Gael)
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57. To ask the Minister for Finance the extent to which this economy continues to remain competitive when compared to other competing jurisdictions within the EU and without; and if he will make a statement on the matter. [5166/15]

Michael Noonan (Limerick City, Fine Gael)
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Substantial progress has been made in terms of improving Ireland's competitiveness in recent years.

There has been a significant improvement in Ireland's economy-wide cost competitiveness. The European Commission in its autumn forecasts estimated that real unit labour costs in Ireland fell by 4.3 per cent annually in 2014, which is the largest decline across all EU Member States and compares with a fall of 1.2 per cent in the UK, and increases of 0.1 per cent in the EU, 0.2 per cent in the US and 0.3 per cent in the euro over the same time period. Competitiveness has been achieved through wage moderation as compared with our trading partners as well as productivity improvements.

Relatively low consumer price inflation over the last five years has meant that Irish price levels have fallen considerably relative to our euro area peers. For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2009. HICP inflation turned negative in December, largely due to a fall in oil prices, nonetheless core inflation (which excludes energy and unprocessed food) was also weak.

In this regard, the ECB's recent quantitative easing announcement is to be welcomed. The Irish economy should benefit through a number of channels. For example, the economy should benefit directly through improved financing conditions for households and firms. In addition, the euro area is Ireland's single largest export destination; therefore, by supporting real economic activity and raising inflation in the euro area this will underpin export growth in Ireland.

Monetary policy also works through the exchange rate channel the recent depreciation of the euro will provide a boost to Irish exports.