Capital spending could increase, says Michael Noonan

The Government is prepared to inject more money into long-term capital spending to meet the growing strains in the economy, Finance Minister Michael Noonan has said.

The promise comes as the Government starts on its review of its plans to spend on roads, rail, housing and schools over the next 10 years.

Mr Noonan in a speech at a conference involving the European Investment Bank — which backs long-term investments in infrastructure — said the Government is prepared to increase capital spending. He said that the Government is expecting the economy to expand 4.3% this year and create 55,000. In 2018, GDP will grow 3.7%, he said.

“The mid-term review is designed to take stock of our national infrastructure priorities now and in the future. We will allocate further resources so that they best meet our social and economic needs and prioritise on the basis of benefits outweighing costs,” he said.

The review has led to a number of business groups such as the Construction Industry Federation and Ibec voicing criticisms the Government needs to increase capital spending and more evenly spread resources for it to meet its social and economic targets.

In contrast, the Economic and Social Research Institute said the economy could in the coming years run the risk of overheating as the construction industry sucks in more workers.

The economy had weathered the initial shock of the UK’s vote to leave the EU but Brexit was still the “principal risk” facing the Irish economy, Mr Noonan said. The wave of populism in Europe and promises for US tax reform by President Donald Trump featured among other risks.