ESRI outlook for Irish economy - Sobering report must be heeded

THE latest ESRI medium-term outlook for the Irish economy is both reassuring and worrying. 

Reassuring because it points to a sustainable long-term growth rate of 3%, a return to net immigration, and unemployment falling to 6%, a figure close to the magical 4% which economists regard as representing full employment.

Worrying because, while the report forecasts certain benefits for the Irish economy arising from Brexit and the prospect that Ireland might see a substantial relocation of foreign direct investment from the UK, this is subject to global demand being sustained and so is tenuous at best.

Equally unnerving is the ESRI’s examination of the EU Commission’s proposed Common Consolidated Corporate Tax Base. It represents a major change in EU-wide tax rules that could devastate small, open economies like Ireland that have an over-dependence on foreign direct investment.

It would not directly increase Ireland’s low corporation tax but would make it less attractive as it would apply to a smaller proportion of a multinational company’s income.

The research also offers a sobering assessment of likely future demand for housing, increasing from 23,000 units a year to just over 30,000 in 2024. This is likely to pose a huge challenge for banks and those saving to buy their own homes.

While the report is hardly pessimistic, it is sobering and economists, politicians, and the wider public should note it.


Lifestyle

The Cosmetify Index reveals the cosmetics companies that are generating the most buzz online – and Dubai-based Huda Kattan has the top spot.Huda Beauty tops the 10 ‘most popular’ beauty brands this year

Read the script of Kya deLongchamps’ kitchen-sink drama to set the scene to make an informed choice when selecting this home essentialTake the plunge: Read this checklist before you splash out on your new kitchen sink

SOMETIMES, the journey is more important than the destination. And sometimes, we just want to sit at home eating a bag of jelly beans, while thinking about more jelly beans. Life is only as significant or special as we make it.GameTech: Death Stranding is a divisive, beautiful journey packaged in a cool world

Former Oasis drummer Tony McCarroll tells Richard Purden about the mad times when five Manc-Irish lads became one of the biggest rock bands in the worldNot looking back in anger: Former Oasis drummer looks back at the mad times of one of the biggest rock bands in the world

More From The Irish Examiner