Ibec welcomes National Accounts numbers from CSO
Ibec, the group that represents Irish business, welcomed today's National Accounts numbers published by the CSO. The final year figures show that the economy grew by close to 8% in 2018 and that rising living standards have led to growth in consumer spending of over 5% in nominal terms. This momentum has followed through to Q1 2019 with strong increases in the value of both exports (13.8%) and consumer spending (4.9%).
Ibec Chief Economist Gerard Brady welcomed the figures stating: "These positive numbers show that the Irish economy continues to experience rapid growth despite rising global uncertainty. Recent data on wages, employment, investment, and incomes had suggested that growth is broad based. These leading indicators are confirmed by today’s numbers. We continue to see the significant positive impact of business activity on living standards in the country. The economy is now close to full employment, with moderate inflation, and the strongest increases in real living standards since the late 1990s. Real after-tax household income in the economy has grown by one-quarter in just five years. This has been matched by no other economy in the developed world. This is all underpinned by business investment in machinery, plant, and equipment of over €2 billion per month over the past 12 months.
“We continue to expect growth in the region of 4% in 2019. However, there are now significant uncertainties facing the Irish economy. Even in the event of a Brexit breakthrough there are reasons to believe that growth will be more muted over the coming years. The global trading environment is becoming more difficult for small open economies due to rising trade tensions and the global economy is now at the top of the business cycle. These factors are now cutting through to the real economy in Europe with analysis from BusinessEurope showing that business associations in twenty-four of the twenty-seven other EU member states expect a slowdown in growth in 2020 relative to 2019.
“The negative impact of mounting global trade tensions, whilst not targeted at Ireland directly, will inevitably wash up on our shores. How long these tensions last, and their ongoing reverberations will have a big say in the future of open economies such as ours. It is imperative that in the face of any Global slowdown the Government do not repeat the mistakes of the past by cutting productive spending. The best way to prepare the economy for the challenges ahead is to follow through on funding key areas of our economic infrastructure through the National Development Plan, a new national innovation strategy, and by setting out a clear plan for the funding of Higher Education.”