OECD: Irish economic growth to slow sharply

GDP growth of 10% this year predicted to fall to 3.8% in 2023

Inflation crisis will weigh on spending and living standards, OECD said.

Growth in the Irish economy will slow sharply next year, the Organisation for Economic Cooperation and Development has said, in projections that are in line with the Government's budget projections.    

GDP growth of 10% this year will fall to 3.8% in 2023 as the effects of the global inflation crisis weigh on spending and living standards, it said. 

The drop in economic activity is even more apparent under the measure of modified domestic demand that more accurately reflects the experiences of Irish households. Under that measure, activity falls to 0.9% in 2023 from growth of 8% this year, it said.                    

However, Vincent Koen of the OECD speaking in Dublin said the Irish public finances were "enviably strong", with the Government set to post a budget surplus this year. 

Nonetheless, the OECD official said Government finances face challenges of significant spending demands, including from an ageing population, the need to spend big on building housing, and to prepare for climate change. 

"It is always great to have a lot of money coming in," Mr Koen said, referring to the large increase in tax revenues the Government is collecting this year from multinationals. 

But he told participants at the Institute of International and European Affairs that relying on a small number of firms for a significant share of the State's revenues "overshadows" other economic risks. 

Mr Koen praised the budget decision to inject funds into the National Reserve Fund.