Ibec Economic Outlook and Government National Economic Dialogue
The economy is this week’s key focus for lobbying and engagement at Ibec with the publication our new Quarterly Economic Outlook, which forecasts an increase in GDP of 6.5% in 2021 on the back of continuing export momentum. This growth, however, is also reflective of a very unstable period with COVID-driven base effects, Brexit, and other international dynamics all leading to volatility in the figures.
Our key message is for a renewed focus on greater fiscal and competitiveness discipline. We call for this to ensure resources continue to be available and used strategically to fix priority economic challenges such as infrastructure, housing, population ageing and climate change.
The timing will also provide an impactful backdrop to the Government’s National Economic Dialogue (NED), which begins today. The Ibec Executive will be led by President Alastair Blair at the NED Plenary and various breakout sessions at which the discussion will include dialogue with the Cabinet Ministers and senior Government officials on all aspects of the economy.
From a business perspective, we can see that the enthusiasm from reopening has been somewhat dampened by growing fears of competitiveness pressures driven by both rapid international price increases on key goods and freight and, domestically, by emerging labour shortages. Whilst strong activity on reopening will be welcomed by business, these additional costs may mean significant margin compression and profitability challenges for some. The global economy remains a long way from ‘business as usual’, with cost pressures and interruptions in supply-chains to remain for some time yet.
As we emerge from COVID, our most significant challenge will be to ensure future growth is sustained and sustainable. Ireland faces some unique challenges in the post-COVID era. We have obvious long-standing infrastructural deficits, significant Government policy commitments in areas like health, pensions, and the labour market, and hugely ambitious climate targets to meet. We are also facing threats to our business model from global corporate tax change. All of these will have challenging implications for economic growth, business competitiveness, and tax revenues in the months and years ahead.
You can view Economic Outlook below and I will be back later in the week with a debrief on the NED.