Ireland Must Check Expenditure And Inflation Says OECD

by Jason Gorringe, Tax-News.com, London

29 May 2003

The OECD (Organisation of Economic Cooperation and Development) has warned the Irish government that it must control wage inflation and tighten the fiscal reins if the country is to compete internationally.

The Paris-based organisation has advised the country that firm control over public expenditure and the maintenance of a supportive tax environment would help the nation bring about sustainable growth.

"Over the longer term, the broad aim of the authorities should be to ensure that the economy will continue to grow at a reasonably high rate and that policies will be more clearly oriented towards protecting interests of consumers rather than producers, notably through enhanced competition in service sectors," the OECD said.

Whilst Ireland has thus far avoided the stagnation that seems to be overcoming some of the moe powerful European economies such as Germany and France, it has struggled to match the double digit rates of growth witnessed in the 'Celtic Tiger' years, and is now suffering a hangover of inflation which is the highest in the EU.

Estimates by the OECD last month foresaw economic growth at 3.25 per cent this year, down from 6.3 per cent last year. However, it expects a mild recovery in 2004 as export demand picks up once again.

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