Written answers

Thursday, 10 February 2022

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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241. To ask the Minister for Finance the extent to which he expects employment to increase and unemployment to decrease over the next year given the urgency of economic recovery in the aftermath of Covid-19 and taking into account the aftermath of Brexit; and if he will make a statement on the matter. [7325/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Measures to limit the spread of COVID-19 had a substantial impact on economic activity and the labour market. At peak in May 2020, approximately 1.2 million people were in receipt of some form of income assistance from the state.

However, since the phased re-opening of our economy and society at the start of April 2021, the outlook for the labour market has significantly improved.

The Government’s policy response – essentially keeping workers close to the jobs market – paved the way for a rapid recovery in employment, which rebounded in the third quarter of 2021 to exceed the pre-pandemic level in 2019.

Forecasts published with Budget 2022 – which incorporated the impact of COVID-19 and Brexit – projected employment to average around 2.36 million in 2022, and the unemployment rate to average around 7.2 per cent over the same period.

The latest employment data and developments around the epidemiology of COVID-19 suggest that there may be some upside to the employment projections, published with Budget 2022, for this year.

Likewise, although the unemployment rate remains elevated at around 7¾ percent currently, the economy should approach full employment (an unemployment rate of around 5 per cent) over the next year or two, which is sooner than projected in Budget 2022.

As part of the Spring 2022 Stability Programme Update, my Department will publish updated labour market projections in April, that will take into account the latest economic developments, including on Brexit and COVID-19.

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