- Government must use position of strength to boost competitiveness and ramp up infrastructure spend
Ibec, the group that represents Irish business, said today's CSO growth figures for 2016 show that our economy continues to experience strong growth as we enter a period of great uncertainty. Overall the economy grew by 5.2% last year. This was driven by strong growth of 7.2% in the final quarter, meaning that the Irish economy has remained the fastest growing in the EU for the third year in a row.
Ibec noted that the figures released today were worrying in some respects, as consumer spending growth slowed to 3% last year, down from 4.5%. The final nine months of 2016 were particularly weak as consumer spending only grew by 2%. Export growth at 2.4% was also the joint lowest that the Irish economy has experienced since 2008. However positive notes were also struck as investment figures show that Ireland continues to benefit from the corporate restructuring which has taken place globally post BEPS, with the final quarter seeing large imports of intellectual property into the country.
Ibec CEO Danny McCoy said: "Todays figures show that the Irish economy continues to be a European success story. They underline the fact that the Irish business model has remained resilient, and has even been strengthened through the OECD BEPS process. Additionally, continued intellectual property imports are a vote of confidence in Ireland as a place to do business."
"The economy is now facing some major external threats, not least from Brexit. The impact of those threats can be clearly seen by the slowdown in export growth and in the figures driven by a weakening amongst our indigenous sector. We are facing those threats from a position of economic and fiscal strength, however. At our Business Leaders conference today I outlined why we must use that position of strength to take take more decisive steps to relieve competitiveness pressures which are within our control by massively ramping up investment in infrastructure, R&D and education."
"The country is now running a primary surplus, we are taking in more than we spend on a day-to-day basis but we are at risk of missing a once in a generation opportunity to invest in the future of the country. Prioritising once off capital investment, while prudently managing day to day expenditure, is the most effective way to protect the economy from the threats it faces."