Finance | Irish economic stability and activity
To ask the Minister for Finance the extent to which Ireland’s economy remains stable, attractive and capable of combatting inflation to the greatest extent possible; and if he will make a statement on the matter.
The Irish economy began this year on a solid footing. As we emerged from pandemic-relating restrictions, economic activity rebounded strongly with little, if any, evidence of permanent ‘scarring’ to the economy.
However, the global economic outlook quickly deteriorated as Putin’s war in Ukraine and weaponisation of energy supply sparked inflationary pressures. We are clearly heading into some very choppy waters with the international economy in a particularly precarious position. Inflation continues at high levels in Ireland and abroad and this is eroding household incomes and squeezing firm margins. However, Ireland enters this period from a position of strength, both in terms of the economy at large as well as our public finances.
Ireland’s labour market continues to perform strongly, with well over 2½ million people at work and an unemployment rate of just 4.4 per cent in October – close to the lowest on record. The unemployment rate is expected to increase marginally over the remainder of the year but is forecast to remain at low levels of around 5 per cent throughout next year despite mounting economic headwinds.
Reflecting the strength of our public finances, I announced a generous package of cost-of-living supports in Budget 2023 to combat inflation and safeguard the stability of the Irish economy. The total package for Budget 2023 amounts to €11 billion, €4.1 billion of which is in the form of temporary cost-of-living measures. The temporary and targeted nature of these measures will ensure that those hit hardest by inflation are supported without inflationary pressures becoming inadvertently exacerbated by government actions.
Despite the headwinds we may face, the fundamentals of the Irish economy remain strong. We have a record number of people at work, we will run a budget surplus this year and capitalise our National Reserve Fund, while at the same time supporting households and businesses to help alleviate the rising price pressures.
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