McGrath: Recession in Ireland next year cannot be ruled out

Public Expenditure Minister Michael McGrath said the Government was forecasting modest growth but a slip into negative growth is possible.

Recession in Ireland in 2023 cannot be ruled out and is a possibility, Public Expenditure Minister Michael McGrath has said.

Speaking at Government Buildings on Tuesday, Mr McGrath said the Government was forecasting modest growth but a slip into negative growth is possible.

“Of course, it is a possibility we cannot rule out that scenario. The level of growth that we are forecasting for next year, is modest, just over 1%,” he said.

Mr McGrath said if the global environment deteriorates further than would have been predicted in late September, then it is possible we could remain static or perhaps slip into negative territory.

“But despite that, our overall forecast is that the economy will remain strong, employment levels will be at a record high and unemployment will remain very low, despite the risks that are, of course, there,” he said.

Mr McGrath said Ireland as a small open economy was facing the risks presented by the global slowdown, but he said the broad base of the economy means we have diverse strength across a range of sectors.

“We are not immune from the changing global economic environment. We did predict our central scenario is a forecast of much more modest growth in 2023. But growth nonetheless, so growth in terms of modified domestic demand of about 1.2%,” he said.

Job losses

And while there have been job losses, there has also been a number of significant jobs announcements in Ireland, Mr McGrath said. 

“So we're not complacent,” he said.

At the same press conference, Social Protection Minister Heather Humphreys announced that from Wednesday until Friday, four separate lump sum payments will be made to 865,000 pensioners, people with disabilities and low-income families, in a €325m package.

Over the course of this week, a €500 disability support grant will be paid to 216,000 people receiving disability allowance, blind pension and invalidity pension. 

A €400 fuel allowance lump-sum payment will be paid to over 370,000 households. A €500 lump sum working family payment will be paid to 44,000 families and a €200 lump sum payment will be paid to 234,000 people in receipt of the living alone allowance.