Irish Economy: Export growth insufficient to pull domestic economy out of recession

poeticseraphim

http://www.finfacts.ie/irishfinancenews/article_1025095.shtml

They even think that the figures don not represent real economic sustainability but actually represent tax strategies.

"So export growth, driven by multinationals, has not had sufficient traction to stop the contraction in Irish domestic demand or a recovery in Irish employment. That said, the level of private sector employment has been broadly stable since the beginning of 2011. The key driver of recent declines in employment has been planned public sector job cuts. The pace of public sector job cuts should slow slightly in 2013 and 2014, allowing overall employment to remain broadly flat."

Disturbingly over a third of the value of Irish service exports is overstated.

A summary of the report

We expect GDP growth of 0.2% in 2012, revised down marginally from our previous forecast of 0.4%.

Our forecast for GDP in 2013 is now 0.9%, revised down from 1.6%, reflecting weaker demand for Irish exports in our key trading partners.

Export growth is now forecast to equal 2.6% in 2012 and 3.2% in 2013, down from 5% in 2011.

Domestic demand will continue to contract

Although GDP expanded by 1.4% in 2011, GNP (which excludes multinational sector profits) fell by 2.5% and domestic demand by 3.7%.

While the robust performance of the multinational sector and associated jobs and investment announcements are welcome, the impact on domestic demand and employment has been limited.

We expect GNP to contract by 0.6% in 2012 and to be flat in 2013. Domestic demand will fall by 2.2% and 0.6% in 2012 and 2013 respectively.

Tax cuts will lead to further decline in consumer spending.

Employment will expand marginally, by 0.3%, in 2013 as the pace of public sector job cuts slows.

But the planned €1.25bn of tax rises will push down on disposable incomes so that consumer spending falls by 0.5% in 2013.

Recent upward revisions to nominal GDP will make it easier to hit bailout targets in 2013, but the key challenge is whether Ireland can achieve nominal GDP growth in excess of 4% over the medium term to stabilize the debt/GDP ratio.

The UK economy has returned to growth and apparently some experts are saying it is doing the best in Europe....which an only help us.

My opinion always was that FF never did anything for domestic entrepreneurship and small domestic businesses are where jobs come from.

ardmacha

The UK economy has returned to growth and apparently some experts are saying it is doing the best in Europe....which an only help us.

Where are these "experts"? The UK is performing similarly to Ireland.

But it is valid to say that the export performance will depend on the economies elsewhere.

NIMAN

Sounds like these 'experts' may have vested interests and trying to talk up a dying pup.

If you look at the UK figures the country is in a mess.

poeticseraphim

NIMAN wrote: »

Sounds like these 'experts' may have vested interests and trying to talk up a dying pup.

If you look at the UK figures the country is in a mess.

Ooops it was the Daily Mail...disregard..

http://www.dailymail.co.uk/news/article-2223343/UK-economy-best-Europe-following-results-lead-way-2015.html

The report on Ireland was from a separate source ..click the link it ....it is interesting info....I think it makes a real point in distinguishing real economic activity and tax strategy ..we cannot rely on low corporate tax rates and foreign investment

Godge

poeticseraphim wrote: »

http://www.finfacts.ie/irishfinancenews/article_1025095.shtml

They even think that the figures don not represent real economic sustainability but actually represent tax strategies.

"So export growth, driven by multinationals, has not had sufficient traction to stop the contraction in Irish domestic demand or a recovery in Irish employment. That said, the level of private sector employment has been broadly stable since the beginning of 2011. The key driver of recent declines in employment has been planned public sector job cuts. The pace of public sector job cuts should slow slightly in 2013 and 2014, allowing overall employment to remain broadly flat."

Disturbingly over a third of the value of Irish service exports is overstated.

A summary of the report





The UK economy has returned to growth and apparently some experts are saying it is doing the best in Europe....which an only help us.

My opinion always was that FF never did anything for domestic entrepreneurship and small domestic businesses are where jobs come from.

I thought a definition of recession indicated negative economic growth. Your figures show positive economic growth (albeit at low levels less than 1%) but your thread headline states recession. Explain?

Voltex

Godge wrote: »

I thought a definition of recession indicated negative economic growth. Your figures show positive economic growth (albeit at low levels less than 1%) but your thread headline states recession. Explain?

There will still be a contraction of GNP...which given the make up of the Irish economy is probably a better measure.

Farmer Pudsey

Irish GDP numbers are skewed by the multinational sector. GNP is often a better refection. This is why people quoting services costing as a % of GDP often make it look like we are not spending money on services.

However a bigger issue is that a lot of multinationals often skew there figures in Ireland to avail of the 12.5% corperation tax. So even though we are seen to be increasing exports it is not reflected in the real economy. Then a lot of the industry we attract is high tech ( another word for low labour content) this agains means that we are not getting a reduction in the unemployed in relation to the value of exports. Now the final nail in the coffin is that more and more we are seeing a bigger number of jobs created going to either graduates from abroad as we are short the skills or low paid work taken up by forigen nationals as Irish workers will not do them

Scofflaw

Voltex wrote: »

There will still be a contraction of GNP...which given the make up of the Irish economy is probably a better measure.

GNP isn't necessarily a better measure of the Irish economy than GDP - and, to be honest, it's usually just used whenever someone wants to make a figure tell a particular story.

poeticseraphim wrote:

My opinion always was that FF never did anything for domestic entrepreneurship and small domestic businesses are where jobs come from.

I'd have to second that.

cordially,
Scofflaw