Irish Economy Well Prepared For Future Challenges
The Irish Department of Finance has published its Annual Review and Outlook dealing
with the outturn for the economy in 2004 and the prospects for 2005, which, according
to the government, indicates that the economy remains on a strong footing and is
well set to face future challenges.
“These figures confirm that our economic fundamentals remain strong,"
announced Minister for Transport, Martin Cullen, who spoke on behalf of the
Government upon the release of the review last week. Mr Cullen continued: "Once again, Ireland continues to enjoy low unemployment, high rates of
job creation, rising incomes, budgetary stability, low inflation and buoyant
economic growth. These welcome features have been the hallmarks of our economy
since 1997 and are secured by the policies and management of this Government."
“While there are challenges, the economic outlook remains very positive.
Historically high oil prices and their international impact are being felt across
the globe, including here at home. We can best deal with them by maintaining
our competitiveness. That means that we must keep our price and wage inflation
in line with our international peers and reinforces the need to continue with
balanced and responsible polices in Government. The Government will continue,
working with the social partners, to pursue sound policies to secure the future." Throughout 2004 the Irish economy continued to record solid growth, in line
with the international economy. National accounts data for 2004 show that GNP
grew by 4 per cent last year, while GDP growth was 4.5 per cent. Employment
growth was particularly robust at 3 per cent or over 54,000 new jobs, the highest
number of jobs created since 2001. Consequently unemployment remained low by
international standards and fell to 4.4 per cent. GNP is forecast to grow by 5 per cent in 2005 and GDP by 5.1 per cent; this
is very strong by European standards. Inflation continued to be moderate in 2004. The Consumer Price Index fell to 2.2
per cent from 3.5 per cent in 2003. In 2005, inflation is forecast to average
2.4 per cent in CPI terms. As a small and very open economy, Ireland is highly integrated into the global
economy through both trade and investment links. As such its economic conditions
are significantly influenced by the global economic environment. The global
economy continues to expand, albeit at a slower pace than in 2004. However,
oil prices are at very high levels and this could result in slower international
growth if sustained. Commenting on the outlook, the Minister for Finance Brian Cowen welcomed the
continued positive growth outlook. “We have a strong record of job creation and real wage growth. To maintain
this performance we must stay competitive and manage our unit labour costs accordingly.
This is in all our interests,” he stated. The full text of the Irish government's Economic Review and Outlook can be found in the Tax News Resources section.
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