Impressive growth figures - Sacrifices beginning to pay off

Yesterday’s Central Statistics Office figures show that the economy is growing at its fastest rate in seven years. This would have been unimaginable even a year ago.

Three years ago anyone brave enough to predict these figures — 7.7% in GDP terms, 9% in GNP terms in the year to the end of June — would have been dismissed as a fantasist. Had someone, as a leading firm of stockbrokers did yesterday, suggest three years ago that growth of at least 4% was likely for the full year and that a rate of 5% cannot be ruled out, they would have offered a cup of tea and a comfortable seat in a quiet, shaded corner to enjoy what was left of their dotage.

The latest Quarterly National Accounts figures are the most cheering economic data recorded since 2007 and they deserve to be celebrated. Equally, the Government policies that led to them deserve to be acknowledged and praised. But, most of all, it must be recognised that these figures could not have been achieved without the kind of communal effort and sacrifice that seemed so incomprehensible and feeble to those who took to the streets in other eurozone countries to protest at unavoidable government belt-tightening.

The welcome for these positive figures must also recognise that they bring an altogether new kind of challenge.

The figures are so far ahead of what is being achieved in other eurozone countries that it will be very difficult, even more so as we move closer to an election, to manage expectations, to maintain the kind of budgetary discipline difficult to sideline the payback-time chorus especially as some of those who lead those demands know they are premature but do so to bolster their election hopes by undermining a Government intent on holding the line. Or as Finance Minister Michael Noonan has put it several times: “break the boom and bust cycle”— even if that seems a Sisyphean challenge for a small, open economy dependent on borrowing.

That Minister for Public Expenditure and Reform Brendan Howlin has conceded that there is “leeway” to consider spending an extra €600m across Government in next month’s budget suggests too that the the political gumption needed to face down demands that will, in time, undo whatever progress has been made since 2007, has been found. That this cap has been put on expectations, despite a suggestion that Health Minister Leo Varadkar has asked for an increase of €1.4bn in health spending, seems the only plausible short-term policy, especially as our debt remains so very high.

There was an air of . He said those who have lost their jobs and those who have been forced to emigrate but might wish to return will get particular attention.

These figures are uplifting but they will make no great change until they lift incomes and that can only happen if we can find the patience to see the process of restoring stability to our public finances through to the bitter end. Then, but not until then, it surely will be pay-back time.