Thursday, 16 December 2021
Department of Finance
261. To ask the Minister for Finance the extent to which he is satisfied that Ireland’s economic progress will continue unimpeded notwithstanding the challenges of Covid-19 and Brexit; and if he will make a statement on the matter. [62731/21]
Due to the success of our vaccination programme restrictions were eased gradually since the second quarter of this year, with the domestic economy recovering strongly as a result. Modified Domestic Demand (MDD) – the best measure of domestic economic activity now exceeds the level immediately preceding the pandemic (2019-Q4) by around 3 per cent. Improvements can also be seen in the labour market with the unemployment rate including PUP recipients now below 7 per cent, the lowest rate since the onset of the pandemic.
Looking forward, early indications point towards an easing in growth rates in the domestic economy in the fourth quarter. Part of this is the continued adjustment in growth towards pre-pandemic trends with re-opening effects and pent-up demand tapering off. Clearly, any further deterioration in the current epidemiological situation that results in the re-introduction of significant restrictions would hamper the economic recovery. However, with our booster campaign ramping up, and around a third of those who are fully vaccinated having now received a third jab, I am confident that, once we overcome the fourth wave of the virus, our economy will strengthen.
The UK plan to implement the new procedures and checks under the Trade and Cooperation Agreement on a phased basis from January of next year is expected to have a negative impact on Irish exports due to increased trade frictions. To help in combatting this Ireland has been allocated over 1 billion euro from the Brexit Adjustment Reserve which will help support employment, businesses and local communities negatively affected by Brexit.
Overall I am optimistic that the economy can continue to grow robustly, thanks largely to our economic model, our well educated work force and pro-enterprise culture. Our resilience and strength comes from being an economy that remains open to investment and facilitates trade across our borders. This has proven to be the fundamental strength of the Irish economy over decades and is still the case today.