OECD interview: Booster jabs offer Irish economy best way to mitigate Omicron hit

Douglas Sutherland is upbeat about the prospects for economies in the OECD orbit

The continuing inoculation of the Irish population, including the booster programme, is one of the keys to getting life in Ireland back to normal again. Picture: Stephen Collins

The booster vaccine rollout offers the best way for the economy to avoid any major financial hit from the surging threat of the Omicron variant, the senior expert on Ireland at the OECD has said.  

In an interview, Douglas Sutherland, the head of the Ireland desk at the Paris-based organisation, said the Irish economy had already shown its remarkable resilience during the 21 months of the Covid crisis, and he was optimistic it would do so again as it faces the threat of the Omicron variant.   

Mr Sutherland told the Irish Examiner his assessment of the risk was "relatively upbeat" and he believed the fallout for jobs and the public finances in Ireland would be limited should new restrictions be imposed. 

Success of vaccine programmes

He stressed the success of the earlier programme to roll out the first vaccines in Ireland and that similar progress over booster vaccines would offer the best way for the Government to mitigate any fallout from the new Omicron wave of the disease.

He said he would be watching the progress of the booster campaign as a measure for  Ireland to avoid adverse economic outcomes from the variant.    

His remarks come as economists around the world scramble to understand the course of the new variant and whether the flare-up will lead to a new round of restrictions and possibly lockdowns across Europe after Christmas, as governments attempt to protect their healthcare systems.  

OECD economies 'now in better shape'

Many economies in the OECD orbit were now in much better shape to ride out the economic storm should new restrictions be found necessary, Mr Sutherland said.      

I do not think it is going to be as bad as the first shock when there was complete uncertainty and nobody knew what was going on, and policy was being formed in the dark.

At the time of the first lockdowns last year, "households and businesses didn’t know what was going on either," he said.  

Mr Sutherland said the Government was doing the right thing by pausing the winding-down of supports until more is known about Omicron. Keeping well-known measures in place will help businesses weather any new shock, he said.  

For Ireland's economy, the capacity to bounce back was quite strong and any potential new restrictions could be short lived. Citing the multinationals based in Ireland, Mr Sutherland said the goods and services they sell around the world had  been a source of resilience for the Irish economy and had delivered for the Irish exchequer too.   

'No quick fix' to housing crisis

However, Mr Sutherland said there was no quick fix to soaring house prices and rents, adding that the 13.5% annual rate in inflation had brought house price levels in Ireland back to levels reached during the boom.   

The OECD is looking closely at house prices across the world and Ireland will continue to be of interest given the legacy of the property market here.     

Following the disruptions to output from Covid, Mr Sutherland said measures should be focused on boosting housing supply. 

The Government should meanwhile avoid schemes such as help to buy, he said.