The Irish economy: stability achieved, growth restored, focus now on job creation
Ireland continues to make steady and sustained progress towards recovery from the impact of the global economic and financial crisis.
After three successive years of decline in GDP, the Irish economy returned to growth in 2011 with a GDP increase of 1.4%. Growth of 0.9% was recorded for 2012 with positive growth is also forecast for 2013. Continued modest expansion is expected in the short-term, with the pace of growth gaining momentum thereafter.
In February 2013, Ireland successfully concluded the ninth quarterly review mission of the Programme of Financial Support with the ‘Troika’: EU Commission, the ECB and the IMF. The objectives of Ireland’s EU-IMF supported programme are to address financial sector weaknesses and to put Ireland’s economy on the path of sustainable growth, sound public finances and job creation, while protecting the poor and most vulnerable. The overall EU/IMF Programme for Ireland has a total value of €85 billion, with the external partners providing up to €67.5 billion, including Ireland’s own resources of €17.5 billion and bilateral loans totalling €4.8 billion from the UK, Denmark and Sweden. By the end of March 2013, Ireland had drawn down 84% of Programme funding.
To date Ireland has met or exceeded all the targets in the Programme, including all quantitative fiscal targets. Over 190 commitments in the programme have been fulfilled on time.
Ireland has restructured and recapitalised its banking system . Within this restructured system, the main domestic banks are now at the early stages of securing normal market funding. Ireland remains fully committed to meeting fiscal targets and reducing the deficit to below 3% of GDP in 2015.
We have pursued a significant programme of fiscal consolidation. Including the most recent Budget for 2013, measures designed to save/yield approximately €29 billion, or around 17% of estimated 2013 GDP, have been implemented. We have beaten all our deficit targets: the latest estimate for 2012 suggests a deficit of 8.2%, 0.4 percentage points ahead of target.
Ireland is open for business .We have made significant competitiveness gains, which both help indigenous enterprise and underpin Ireland’s continuing success in attracting foreign direct investment (FDI). Despite the major challenges on the fiscal side, targeted incentives have been introduced (particularly for research spending and intellectual property), while new changes to the visa regime make it even easier for entrepreneurs to invest or set up in Ireland.
Support for overall activity is coming from the exporting sectors, with services exports becoming an increasingly important engine of growth. Our balance of payments is in a very healthy position, with surpluses in each of the last three years. Ireland supports its exporters, backs its entrepreneurs and drives research and development .
There is also now a much greater focus on supporting economic growth that delivers jobs . New initiatives have been launched to boost job creation through an ambitious Action Plan for Jobs, and the government’s Pathways to Work is designed to enhance labour market activation.
This new video about Ireland's own work towards stability, jobs and growth was first shown to international and Irish media attending the Informal Ecofin meeting at Dublin Castle on 12/3 April 2013. It is a joint project between the Irish Presidency, the Irish Department of Finance, Enterprise Ireland, IDA Ireland, Tourism Ireland and Bord Bia (Irish Food Board).