Latest Economic Outlook report gives cause for optimism
The latest CEO Update newsletter to Ibec members from Danny McCoy
Recent months have shown the continuing resilience of Ireland’s export-driven model and despite the ongoing challenge of COVID and inevitable impact of Brexit, this morning’s publication of Ibec’s Economic Outlook strikes a chord of optimism. Ireland now looks on course to be the only country in Europe with strong export growth and potentially a growing economy with an increase of 0.8% in GDP forecast in 2020.
In contrast, parts of the retail sector and the entire ‘experience economy’ have been severely disrupted by enduring restrictions. The recent progress toward a vaccine rollout, although not a panacea, provides some hope of a return to normality for consumer facing sectors over the next twelve months. In the meantime, the scale of corporation tax receipts enables Government to cushion people and businesses requiring supports and liquidity during the continuation of this stressed period. Again, the levels of corporate taxation buck the international trends.
The New Year will also bring change and challenges. No matter what happens when it comes to the trade negotiations, the UK’s transition out of the EU will end and a new relationship will begin both on this island and with Britain. This will bring significant additional costs and unavoidable disruption.
We have had many advantages in Ireland during this era of great disruption, both as a society and as an economy. It is critical that heading into 2021, we avoid misreading the signal from the noise and use the levers within in our control. Over €11 billion of savings have accrued in the bank accounts of Irish households this year – this is one such lever. If we find the right incentives and channels to deliver those savings into local economies, then 2021 could be an extraordinarily strong year.
At last week’s Ibec Regional Insights event, I gave an address on how Ireland might construct a framework to achieve sustainable development for all using a ‘pyramid of sustainability.’ I believe that this is a useful structure for all stakeholders to appreciate and engage with so that collectively we can turn hope into reality. If you missed it you can view the video here.
I leave you with the full publication of our Quarterly Economic Outlook below.
Please let me know if you have any comments or queries, it’s always good to hear from you.