Irish Economy Booming

by Jason Gorringe, Tax-News.com, London

06 April 2007

Data released by Ireland's Central Statistics Office has showed that the Irish economy grew by 6% last year - the strongest rate of growth since 2000. However, Minister of Finance Brian Cowen cautioned the government not to rest on its laurels but strive to maintain Ireland's competitive low-tax economy.

“These are very strong figures and confirm that the economy performed very well in 2006," Cowen said. "Economic activity last year was particularly buoyant. The figures are in excess of what most commentators had been assuming. There was an improvement in our export performance last year mainly due to higher services exports. In terms of this year, my Department is forecasting a continuation of strong economic growth, with GDP and GNP both expected to rise by 5.3%."

But Cowen went on to add:

“Despite the size, strength and length of our economic success, we must not take that success for granted. We live in an increasingly competitive global environment in which we have to trade if we are to prosper. We must ensure that we maintain and build on our competitiveness and government policies can best contribute to that objective by keeping our taxes low, by keeping our costs in check and by building a better public infrastructure.

"We can only deliver on these objectives by maintaining a sensible, responsible and prudent budget policy which only commits the government to spending and tax levels which are affordable today, tomorrow and in the long-term. Budget responsibility is the best guarantee of our future prosperity."

The minister concluded:

“These risks highlight the need to remain competitive as well as the need for prudent management of the public finances in order to provide room for manoeuvre in the event of difficulties arising. That is why the National Development Plan will have first call on resources and will be implemented in full, on time and on budget if we are re-elected to office.

"All our plans for the future are dependent on maintaining a strong economy. Without economic growth, we will not have the resources to reform our taxes, to fund improvements to our public services. That is why we must work to ensure that our economy remains strong and that is why we must follow policies aimed at the decades ahead.”

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