GDP figures: It’s payback time Minister Noonan

The mood music of the economy has an upbeat rhythm following the latest figures from the Central Statistics Office (CSO) showing gross domestic product (GDP) grew by an encouraging 2.7% in the first three months of the year.

If that trend were to continue, Finance Minister Michael Noonan would find himself ideally placed in Budget 2015 to ease the next phase of the Government’s programme of austerity. In another positive development, a CSO revision of last year’s economic growth found that GDP grew by 0.2%, outstripping its earlier estimate of a 0.3% contraction.

Having seen the lifeblood sucked out of the economy for the past five years and money taken out of the pockets of people who have nothing left to give, those living outside of Dublin are wary of forecasts of an improvement in Ireland’s economic fortunes. There is no denying that for most people beyond the boundaries of the historic ‘pale’, a really positive impact of economic recovery has yet to be felt.

After what the Irish people have suffered, a cautionary warning should be printed on every tin containing bubbly comments about an island economy on the westernmost edge of Europe, heavily reliant on a buoyant export trade and acutely susceptible to sudden changes in global trends. Yet, according to most economists, a tangible recovery is now on.

Going on the CSO figures, there are promising omens are in the air. Basically, GDP means the market value of all goods and services produced in a year or over a given period. So, included in the latest figures are car sales, research and development, and increased taxes paid by unemployed people going back to work.

Bizarrely, new rules set by the EU for measuring GDP mean that in future, the yardstick will include the market value of such illicit activities as prostitution and drug-running. Presumably, given Ireland’s pivotal position as a maritime crossroads in the international drugs trade, we can expect to see even better economic results from now on.

Having suffered a stinging backlash at the polls in recent local elections, worried TDs and senators of the Fine Gael-Labour Coalition should by now be well aware that people are fed up to the teeth of being ground down by oppressive policies. Nothing is more calculated to raise the barometer of public rage than long-winded lectures on ‘patriotism’ and the ‘good of the country’ delivered by politicians whose backsides are cushioned from the rigours of austerity by overgenerous pay, perks and pensions.

Despite the positive CSO figures, tens of thousands of families are groaning under a yoke of hardship. Mr Noonan is on record as believing that Ireland will not require an adjustment of €2bn in cuts and tax increases in Budget 2015 to ensure the national deficit falls below 3%. It would mean going against the EU Commission, the Irish Advisory Fiscal Council and the International Monetary Fund, all of which demand more cuts.

If the minister resists such demands, he can be sure of the support of the whole country. In an economy already pared to the bone, flexibility and not rigidity is needed. With water charges coming down the track, the time has come for Mr Noonan to give something back.


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