Michael Flynn, head of real estate at Deloitte Ireland said: “The strength of the Irish economy has been mirrored by yet another strong year for development

Do you think that the Republic of Ireland is well run?

Yes but …..

On the basis of most key economic indicators, Ireland is well run, for instance;

  • Gross General Government Debt as a % of annualized GDP is currently 74.3% down from a peak of 124% having reached a peak in 2012 of 119.5% (and a pre crash low of 23.6% in 2006 – BUT roughly half of this reduction is due to a 2015 CSO recalc of Irish GDP ^ and revised CSO growth indicator GNI reduces Irish GDP by one third.
  • The Unemployment rate is currently 6.3% in June 2017 down from 8.3% in June 2016 and a peak of 15.2% in Jan 2012 – But cash is needed for long term unemployed/education schemes.
  • General Government Deficit for 2016 was equal to 0.70% of GDP after a historic high of 32.1% in 2010 – (Property Tax introduced to stabilize annual tax revenue, no appetite for additional tax) But backlog in Infrastructure spend V Eu fiscal cap on infrastructure spending.
  • Irish GDP in June 2017 had increased by 6.6% from June 2016 and Irish GNP by 10.1% over the same period – 4th year as top EU performer But National Sovereign Debt is €200Bn+
  • Irish GDP in 2016 was worth $294bn or 0.47% of the World Economy and up substantially from $221bn as recently as 2010 – But the effective sterling devaluation relative to Euro over past 2 years reduces Irish competiveness
  • Ireland’s trade surplus for 2017 is projected at approx €49Bn

By any reasonable economic assessment these are remarkable economic figures and show a very strong recovery after the recent bailout of the Irish Economy and that Ireland is now much better run economically. The economic recovery was underpinned by the fact that Ireland’s underlying economics as a net exporting nation remained strong during the downturn but had poor economic management due to tax revenue from property being solely transaction based rather than an annual asset based tax (the tax base still needs to broadened). We glanced the Iceberg, took in a lot of water but the ship has slowly been steered away from danger. These are also the figures and stability that foreign investment will look favourably at when considering future investment in Ireland.

BUT Your good macro economic management do not pay my bills. There are many social issues that Ireland needs to tackle (i.e. spend money on) and indeed can start to tackle as Ireland PLC. is off the emergency operating table, many individuals, sectors and demographics have suffered during the downturn and continue to suffer.

  • There is little or no investment in Social Housing, 600 in 2016, 2,600 in 2017 projected. 1 in 5 households now live in private rented accommodation compared to 1 in 10 only 10 years ago, this is putting huge pressure on the private rental market which is not coping and also impacting student accommodation. €€€
  • Construction assets including apartment blocks, sold at rock bottom prices, are being called in by “Vulture” funds seeking a return on their investment and potentially push more tenants onto the private rental market. €€€
  • Homelessness is at an all time high, hotels are being used to house families, up 27% since June 2016. As of June 2017 there are almost 8,000 homeless recorded in Ireland, 33% of them children (Focus Ireland figures) €€€
  • “The Boomerang Generation” adult children remaining in the family home has increased considerably with 25% of married couples having an adult child living with them due to high rents and property prices. €€€
  • Personal debt levels are significant with Irish households the 4th most heavily indebted in Europe. €€€
  • Ongoing pressure for Healthcare & infrastructural expenditure €€€

Social issues will cost Ireland a considerable amount if not addressed in the short term which may be difficult to address by a Government used to wearing it’s economic austerity blanket. The overall economy has been righted but the people need “fixing” too. We had a safety net during the recent downturn in that Ireland’s Gross General Government Debt as a % of annualized GDP was only 23.6% in 2006, we do not have this safety net now but we do have a somewhat more stable tax collection mechanism. The next 2 years will be interesting with the potential economic impact of Brexit also in the mix and if the current political arrangement stays in place then we can decide if Ireland is well run with the next General Election due before 2021. So yes the Republic of Ireland is well run economically but in Ireland you’re only as good as your last feck up.


(^) It must also be noted that using GDP as a benchmark is inflated in Ireland (ROI) due to some Irish based FDI companys declaring profit from abroad, contract manufacturing, moving profit through Ireland or/and Aircraft leasing , the Irish Central Statistics Office introduced a new growth indicator called GNI to reduce the impact of volatility Irish GDP. Irish economy about one-third smaller under new growth indicator

(^) While GDP was increased by a whopping 24% in 2015 due to a recalculation by the CSO, the real €value of our debt has increased. The debt to GDP ratio decrease is also due to an increasing GDP.

FN1 There is also a lack of investment and/or development of Irish SMEs and an over dependence on FDIs

http://www.cso.ie/indicators/Mai…

http://www.independent.ie/busine…

Irish household debt falling faster than in any other EU country

About Homelessness – Focus Ireland

Muiris Mac Cartaine’s answer to What is the most Irish thing ever?