Economy stable but no recovery under way yet

The economy has stabilised but has still not recovered, with further reform essential to restore competitiveness, said the National Competitiveness Council.

Launching the organisation’s annual benchmarking report Ireland’s Competitive Scorecard 2012, NCC chairman Dr Don Thornhill warned against complacency and recommended a “relentless and thorough focus on reform — including those structural reforms agreed with the troika”.

The report, prepared for the NCC by Forfás, provides an assessment of Ireland’s competitiveness performance, using data from Forfás itself, the OECD, Eurostat, the CSO, and others.

The report also shows that while consumer prices fell from Sept 2008, they began to rise at the start of 2011.

Price levels in Ireland were the highest in the eurozone in 2005 and continued to increase until Sept 2008. On an annual basis Ireland experienced deflation in 2009 and 2010 as the overall costs of consumer goods and services declined. However, prices began to rise again in Jan 2011, albeit at a slower rate than the eurozone average.

Martin D Shanahan, chief executive of Forfás, warned that while the economy was stabilising, the consequences of the recession would be felt for a long time.

The report reveals that while the economy grew for the first time since 2007, the last year was challenging.