Peter Burke (Longford-Westmeath, Fine Gael)
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My Department continues to monitor risks to economic activity and employment for both the locally- traded and international sectors of the economy.

As set out in Budget 2024, risks in the near-term are tilted to the downside. The rise in interest rates, which the ECB does not expect to cut before Summer, would be expected to dampen international growth. Given the open nature of the Irish economy, a slowdown in international growth may lead to more moderate rates of domestic growth. Demand cyclicality can also have implications for sectoral economic growth – such as the demand for pharmaceutical products which had seen significant growth during the COVID-19 pandemic, bolstering Irish exports during that period. As an open economy, we are also aware of the risks presented by which any rise in protectionism internationally.

Despite these risks Ireland’s economy has demonstrated substantial resilience over the past number of years and into 2024, reaching full employment during a challenging period for the global economy, with an unemployment rate of 4.3% in March. The risks to employment will depend on the risks to the economy, more broadly. Added to this, Irish GDP grew by 15.1% in 2021, and 9.4% in 2022, therefore, a moderation in economic growth might naturally be expected. A moderation in growth is also forecast by the ESRI in their recent Quarterly Economic Commentary (Spring 2024), with GDP growth of 2.5% and 2.3% forecast for 2024 and 2025 respectively.

The Government’s commitment to supporting enterprise through periods of increased input costs and heightened uncertainty was demonstrated in Budget 2024, which contained a number of measures to support businesses. This included the Increased Cost of Business Grant, and an extension of the 9% VAT reduction for gas and electricity (until 31st October 2024), among other measures. Further measures were announced in response to the publication by my Department, and the Department of Social Protection, of an impact assessment of recent and forthcoming changes to working conditions.

As set out, my Department continues to monitor sectoral economic activity and risks to this activity. As with the supports which were provided to help businesses with rising inflation, there is a limit to how much direct support Government can offer firms to shelter them from international economic developments and associated risks.

The Government’s approach to enterprise policy continues to be guided by the priorities set out in the White Paper on Enterprise 2022-2030 – published in December 2022. This review of Enterprise Policy was the first since 2018 and was motivated by an awareness of a changing enterprise landscape posing new challenges, including shifting patterns of globalisation driven by geopolitical change, disruptive technological innovation, and lagging productivity in parts of the indigenous sector of the economy.