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Finance | Extent to which this country’s economic principles remain firmly seated

To ask the Minister for Finance the degree to which he remains satisfied that the economic principles in respect of this country’s economy remain firmly seated; and if he will make a statement on the matter.


Prior to the pandemic Irish economic fundamentals were strong, with robust growth, a labour market close to full employment, relatively modest credit growth, and surpluses in the underlying current account and the public finances. The outbreak of the Covid-19 pandemic turned the economy on its head, but we weathered the storm and achieved a remarkable economic recovery.

The economy is now facing new and significant headwinds as a result of the war in Ukraine, including rising energy and commodity prices. Consumer price (HICP) inflation rose to 8.3 per cent in May, a multi-decade high. While rising prices are impacting on Irish households and businesses, the key drivers of inflation at present are external in nature and almost every advanced economy in the world is in the same position.

Notwithstanding these challenges, the economic fundamentals of the Irish economy remain strong. The labour market has remained resilient, with the unemployment rate of 4.7 per cent in May the lowest since 2006. The external side of the economy also continues to perform very strongly with exports in excess of €150 billion in the first quarter, and the modified current account is expected to remain in surplus. While geopolitical tensions and global issues of supply are risks to Ireland’s economy, our resilience and strength ultimately comes from being a dynamic economy open to investment and trade across our borders. This has long proven to be the fundamental strength of the Irish economy, and that remains the case today.



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