Soaring economy is at an Icarus moment

As we march towards the climax of Christmas, a well-exercised credit card at the ready, the Greek fable about Icarus, the boy who ignored his father, Daedalus’ advice and flew too close to the sun and fell to the sea and drowned, may not immediately spring to mind, or even seem relevant.

As we march towards the climax of Christmas, a well-exercised credit card at the ready, the Greek fable about Icarus, the boy who ignored his father, Daedalus’ advice and flew too close to the sun and fell to the sea and drowned, may not immediately spring to mind, or even seem relevant.

However, the welcome for yesterday’s figures, showing that growth in the economy has once again outstripped expectations, must be tempered with a niggling sense of déjà vu.

The economy grew by a spectacular 10.5% year-on-year in the third quarter of 2017. The latest quarterly accounts show GDP jumped 4.2% in the third quarter alone. This was nearly eight times the growth rate recorded in the eurozone.

However tempting it may be to imagine the Ghosts of Celtic Tigers Past have returned and that it’s different this time, a series of reports from the Irish Fiscal Advisory Council, the Economic and Social Research Institute, and the Central Bank have already advocated caution and restraint.

The vigour of the recovery represents a risk to the domestic economy and continued rapid growth will see the economy reach capacity by early 2019. A failure to rein in demand runs the risk of repeating the mistakes of the last decade and almost ensures a return to recession. Had he the opportunity, Icarus might have learned his lesson — surely we have and surely we understand the risks we are running.