State ‘should increase’ capital spending

The Government should use the improving economic situation to bolster investment in capital infrastructure — but ensure it avoids the “speculative” investment mistakes of the past, an economist has said.

Tom Healy of the Nevin Economic Research Institute highlighted the steep decline in capital spending between the height of the boom and subsequent years.

“Following the crash of 2008-2010, by 2011, Ireland recorded the lowest level of investment as a percentage of GDP of any EU state with the public and private sectors deleveraging in tandem,” he said. “The proportion of investment devoted to capital investment was 15% in that year compared to 30% in 2006. Moreover, the rate of public investment was among the lowest in the EU.”