Dept of Finance: Economy at risk of overheating

Dept of Finance: Economy at risk of overheating

The economy is currently operating below its potential, but will start growing from next year and could overheat, says the Department of Finance.

The department published two research papers on the productive potential of the economy. It found that the economy is operating marginally below its potential level in 2018 and there is additional capacity.

It said it is likely that the economy will reach and exceed its sustainable level of production in the coming years. The department said that is consistent with its view that the economy will soon reach full employment.

Finance Minister Paschal Donohoe said he noted from the reports that “the estimated output gap is forecast to turn slightly positive in 2019 and increases thereafter”. He said that pointed to signs of overheating in the medium term “which is something the Government is acutely aware of and remains cognisant of at all times”. He said the focus is on maintaining competitiveness-oriented policies “whilst avoiding pro-cyclical policy measures”.

“To this end, the Government is actively building capacity within the economy through increased public capital investment,” he said.

More on this topic

Consumer spending in June fell to lowest level in five yearsConsumer spending in June fell to lowest level in five years

Ireland's per capita debt level stands at €44,365Ireland's per capita debt level stands at €44,365

Irish economy grew by 8.2% last year, figures showIrish economy grew by 8.2% last year, figures show

Sun still shining on Irish economy, but Brexit storm clouds are gathering on horizonSun still shining on Irish economy, but Brexit storm clouds are gathering on horizon

More in this Section

Plan to rejig health service criticisedPlan to rejig health service criticised

Varadkar and Johnson must commit to restoring power-sharing in the North, says MartinVaradkar and Johnson must commit to restoring power-sharing in the North, says Martin

Consultant fears plan will cut hospital linksConsultant fears plan will cut hospital links

Micheál Martin: Boris Johnson's appointment raises 'enormous fears' for UK-Irish relations Micheál Martin: Boris Johnson's appointment raises 'enormous fears' for UK-Irish relations


Lifestyle

Homemade ice pops are handy for many reasons, they refresh on a warm day, but also you know exactly what is in them; no strange colourings or preservatives.Michelle Darmody's home made ice pops

Sometimes travel can be more about the journey than the destination, as Caroline Hennessy and her family discovered when they took a 13-hour overnight journey from San Sebastián to Lisbon to check out the Trenhotel experienceTravelling by train in Europe - with kids

The Great Hack looks at the implications of the scandal involving Cambridge Analytica and Facebook, writes Laura Harding.When tech firms go bad: Netflix's new documentary on Cambridge Analytica / Facebook scandal

Often hailed as one of the greatest animated films ever made, The Lion King has a special place in the hearts of generations of children.New King of the jungle: The director behind The Lion King remake

More From The Irish Examiner