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DELAYS IN ADDRESSING capacity constraints in housing and other infrastructure could push inflation upwards and damage competitiveness, the Central Bank has warned.
The Central Bank has published its new quarterly bulletin detailing the latest outlook for Ireland’s economy, which it expects to grow over the coming years while unemployment remains low and inflation slows.
However, there are several potential risks that could throw its forecast of stable growth and lower inflation off course.
In a statement, the Central Bank has said that with geopolitical tensions “remaining elevated”, the current downward trend in energy prices could change and there could be renewed upwards pressure again on inflation.
Additionally, if the period of low growth in the global economy lasts longer than expected, it presents risks to Ireland’s economic outlook.
“Delayed progress in addressing capacity constraints in housing and other infrastructure could generate higher and more persistent price and wage inflation and damage competitiveness,” the Bank said.
Furthermore, increases in labour costs above productivity could put pressure on inflation, while a downturn in the pharmaceutical or ICT sectors would weaken net exports, domestic investment, tax revenue and economic activity compared to forecasts.
The bank warned that ensuring Ireland’s economy has the capacity to absorb necessary investment to address challenges in housing and climate change while being fiscally sustainable will require more active consideration. This will include considering the role of various taxes and expenditures.
The Central Bank also outlined that exports produced in Ireland declined in 2023 but it said this should recover in 2024 and subsequent years, driven by a return to growth in pharmaceutical trade.
Net wealth inequality has decreased since 2013 but the richest 10% of Irish households still own 48% of total net wealth, according to the bulletin.
Director of Economics and Statistics said Robert Kelly said that “global headwinds and domestic capacity constraints” are affecting the growth of the Irish economy.
“Disinflation has been significantly progressing and external price pressures have largely passed. However, domestic price developments – especially in the services sector – have been more persistent,” Kelly said.
“With moderate growth in the domestic economy anticipated out to 2026, increased focus remains on enhancing supply conditions to bolster resilience and support a sustainable growth in living standards.”
The bulletin further detailed how the labour market is operating at full capacity and the unemployment rate “still remains close to all-time lows”, though it says that employment growth has slowed.
The unemployment rate is expected to average out at around 4.5% between now and 2026.
The pace of growth in employment numbers slowed from 6% in December 2022 to just 2% in December 2023.
Recent data also points to weakness in investment in Ireland, led by declines in the multinational sector.
“Headline investment increased by 2.9% in 2023, buoyed by an increase in imports of R&D-related services and trade in intellectual property in the final quarter,” the Central Bank said.
“Modified investment, which attempts to exclude some of the distortions related to globalisation, was significantly weaker, falling by 7.1% in 2023 as machinery and equipment and commercial construction declined from exceptional levels in 2022.”
Machinery and equipment investment, excluding aircraft leasing, declines by 9.8% last year, which is attributed to significant plant-specific investments from multinationals in recent years coming to a conclusion.
Housing investment grew last year, with investments in new dwellings up 9.4% for the year.
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Isn’t it amazing that the families of the victims of the disaster are expected to pay legal fees when a drug dealer s unmbag can get free legal aid.
Just pay the bill Enda
He will only pay it if they sign away everything, so another well connected gangster will get away with murder and the victims family’s can FCUK off pure and simple
If there is an agreement in place it should be honored immediately. This is such an emotionally charged case and these people have been thru enough,please do the decent thing. I remember the event well even tho I was only 10 yrs old. Myself my sister and two neighbours set up a garage sale on the side of the road,we gave the proceeds to the local priest to give to the victims fund. The images on TV are still as vivid today to me as they were 33 yrs ago. An absolute tragic event that should never be forgotten .
I’m sure you just asked the government to do the right thing. Not going to happen unless the legal team are friends of FG.
I bet you every Gov politican would have promised to help them when they were in opposition but like every dog in the corner they will run away when challenged on their promise’s…also Happy Gilmore is out in Brussels trying to fix the problems in the Ukraine so don’t bother contacting him about it anyway
One should be careful about accepting promises from any government unless one is Ibec, RTE, a bank or a bondholder, multi-national or part of the farming lobby or some other part of the establishment; or a friend of a leading politician. That is show it is in Ireland.
When you see the word ‘promise’ in the same sentence as the word ‘politician’, the first word to enter your mind should be ‘lie’.
1st word is – It better be written down.
These are families that have never healed or gotten closure for their grief and loss. Could’nt Butterly toss in a few Euro’s towards this as well, seeing as how he did so well financially & legally out of the deaths of 48 young people on his sub-standard premises!!!
“They are agreeable to having their costs measured on the basis of all work done in connection with the above hearings”
Question. How much will the Governments charge for measuring that all work done was in connection with the hearings? I bet it’s more than €192k.
The Stardust Disaster was one of the most appalling tragedies to ever happen in this State and appropriately a Judicial Enquiry was held to uncover the cause even though we were all well informed at the time as to the likely cause. Jam factories are hardly ever likely to be suitable buildings for night clubs and especially when Emergency exit doors are chained and locked while large numbers are on the premises.
The Government should urgently look at this request but the problem is that the survivors are still demanding another Judicial Enquiry into the tragedy and someone has to eventually suggest we stop as its not going to be resolved after so many years no matter how awful the loss and cause.
Well, that explains a lot.
Finally, i’ve copped on. This whole Journal.ie site, it’s a load of horse shite. Set up for eejits, to make bigger eejita of themselves, but pretending to be about truth. I’m outa here, gone, bye bye.
Is this money owed to the grieving families or to a bunch of greedy lawyers?
Geraldine Foy has given us the power to fight on and only for her we wouldn’t have gotten this far
have your say