Central Bank forecast - Economic trends must be addressed

The Central Bank, which had been forecasting that the economy would grow by 5.75% this year, has scaled back on its prediction to growth of 4.75%.

The economy had been doing very well in recent years, so this slowdown is understandable.

The economic outlook is still good, but the Central Bank warns that we should be aware of some worrying trends that need to be addressed.

The current rate of our inflation, which is the highest in the eurozone, is giving rise to most concern, because it is likely to remain higher than the other countries using the euro for some time yet.

This will inevitably impact on our competitiveness. Our export rate has fallen behind world levels, which is an indication that the country has lost some of its market share. This need not be of immediate concern, but it could become problematic, if the decline continues.

Rising oil prices are a key to our inflation, because of Ireland’s high dependence on imported oil. The Government must resist pressure to buy the next election. Making promises that will fuel inflation will further undermine our competitiveness.

The massive growth in home-building over the past decade has peaked and there are now indications that it is slowing down.

A halt in the rise of house prices, and even a modest decline, should be welcomed as part of the promised soft landing.

The country has achieved much in economic terms in the past two decades, since the dark days of 1987.

We should not allow complacency to blind us to the need for remedial action now in order to preserve the past gains and stabilise our economic position.