Written answers

Thursday, 4 July 2024

Photo of Jim O'CallaghanJim O'Callaghan (Dublin Bay South, Fianna Fail)
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240. To ask the Minister for Finance the action taken to sustain and boost Ireland’s economic competitiveness since July 2020; and if he will make a statement on the matter. [28934/24]

Photo of Jack ChambersJack Chambers (Dublin West, Fianna Fail)
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Despite facing a number of economic headwinds over recent years, the available evidence suggests the economy is in good shape, at least in aggregate terms. The brightest spot in the Irish economy is undoubtedly in the labour market. At the start of this year, over 2.7 million people were in employment – a record level.

Just like most other advanced economies, Ireland has had to grapple with the dual headwinds arising from multi-decade high rates of inflation alongside the rapid tightening monetary policy over recent years. Taken together these headwinds have weighted heavily on households and businesses alike.

From the outset, the Government recognised the potential challenges these headwinds would pose to Ireland’s competitiveness. By responding swiftly and decisively, the Government helped to mitigate the impact on both businesses and households. The temporary and targeted nature of the cost of living supports taken by Government were designed to avoid adding to the inflationary burden whilst providing support to those most in need.

Fortunately inflationary pressures have now abated, with the latest data showing inflation has fallen to just 1.5 per cent in June, its lowest rate since April-2021. Ireland now has one of the lowest rates of inflation in the Euro Area. Over the first half of the year the inflation rate has averaged 2 per cent. Looking ahead, my Department anticipates inflation to remain around this level, in other words, in line with price stability. Against this backdrop, growth in economic activity is expected to accelerate as the year progresses, as set out in the Department of Finance’s spring economic forecasts.

Despite our economic position remaining strong at present, we are nevertheless living through a time fraught with uncertainty. Conflicts around the world, the escalation of geopolitical tensions, a new era of subsidies and tariffs and the fragmentation of global trade could all have knock-on implications for the Irish economy. Whilst we cannot prevent external shock from occurring, we can ensure that we are on the best possible footing to respond to these shocks when they do occur. The Government will continue to monitor external developments closely and stands ready to take the necessary steps to safeguard Ireland competitiveness.


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