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Finance | Irish economic progress

To ask the Minister for Finance the extent to which he is satisfied that Ireland’s economic progress will continue unimpeded notwithstanding the challenges in the aftermath of Covid-19 and Brexit; and if he will make a statement on the matter.

Earlier this year, Ireland make a significant step forward by removing all remaining Covid-19 restrictions. With little evidence of permanent economic scarring, it seemed as though our economy would rebound strongly this year.  However, the outlook quickly changed with Russia’s invasion of Ukraine, sparking an energy supply crisis and ensuing inflation.

Our economy is now faced with significant headwinds, the most prominent being the cost of living challenges faced by individuals and businesses in Ireland. Consumer price (HICP) inflation rose to 9 per cent in August. The inflationary shock has been mainly driven by energy price rises, but spillover effects to core (non-energy) inflation are now evident. The government is committed supporting individuals and businesses to face these inflationary challenges. As part of Budget 2023 next week, the Government will set out a series of targeted once-off measures to be introduced over the course of the winter to help alleviate cost of living pressures. While there will be a significant support package included in the budget, it must be stressed that the government cannot absorb the full impact of inflation and we must ensure that we do not inadvertently add further to inflationary pressures.

Despite the challenging nature of this economic cycle, Ireland’s economic fundamentals remain strong, especially in the labour market with 2 ½ million people currently in employment, and the unemployment rate falling to just 4.3 per cent in August. Despite the challenges posed by Brexit, the external side of the economy also continues to perform strongly, with strong export growth in the ICT and pharmaceutical sectors.

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