Good economic news thread

Rightwing

Godge wrote: »

The ESRI, IBEC, Central Bank and the Department of Finance are all punters?

They are forecasting and we'll be kind to them, they are not very good at it.

chopper6

Get Real wrote: »

A phased reintroduction of the social welfare Christmas bonus

Why...so they can spend the extra money on drink?

murphaph

Godge wrote: »

It looks like the government will be able to do some or all of the above and still finish well within the Troika targets.

Why not keep taxes as they are and build some badly needed infrastructure rather than blowing it buying an election?

murphaph

Godge wrote: »

The ESRI, IBEC, Central Bank and the Department of Finance are all punters?

In fairness they've all made spectacular mistakes in recent years.

Sand

NIMAN wrote: »

Can someone answer me this one?

I heard a guy from the ERSI on the radio the other day, saying he expects to see 5% growth this year and next for us. Fair enough, exports are booming apparently.

Well this morning on the Business News on Rising Time on RTE radio I listened to how the US, German, Japanese, Chinese and Brazilian economies are all showing poor enough data, and that they are downgrading some of their growth forecasts etc.

So if the worlds biggest economies are downgrading, how come a tiny country like us are claiming we are going to be booming the next couple of years. We need people to be buying what we're selling.

Could these 5% figures be about to go belly up over the next year or so?

"Exports" in the Irish sense are an accounting trick, highly dependant on tax avoidance strategies by multi nationals. They book profits made abroad against the Irish taxation system, boosting "exports" in a false and misleading way.

Hence Irish exports can climb by 5% when the global economy is slowing. Where the bull**** goes off the charts is where Irish politicians loudly claim this is anything substantial or solid that can underpin actual economic and fiscal planning for years ahead. It is a windfall, we're taking a slice of other peoples money that otherwise has very little to do with the Irish economy. Here today, gone tomorrow. Next year the multi nationals could decide to reinvest or book their revenue against another jurisdiction offering a tax avoidance benefit. With the imminent demise of the double Irish, exports could take a significant decline - the ultimate aim of other states is to ensure that the revenue generated in their territory is taxed in their territory which is bad for Ireland as we are a tiny market.

The sheer size of the multinational sector compared to the rest of the Irish economy means overall Irish economic figures (such as labour productivity, exports, GDP, etc.) are all significantly impacted by these windfalls in a way that larger economies are not. It is, and has been, damaging to overall economic and fiscal policy because our political classes want to believe they are genius's and so don't bother actually developing or supporting a coherent economic policy.

ardmacha

Sand wrote: »

"Exports" in the Irish sense are an accounting trick, highly dependant on tax avoidance strategies by multi nationals. They book profits made abroad against the Irish taxation system, boosting "exports" in a false and misleading way.

Hence Irish exports can climb by 5% when the global economy is slowing. Where the bull**** goes off the charts is where Irish politicians loudly claim this is anything substantial or solid that can underpin actual economic and fiscal planning for years ahead. It is a windfall, we're taking a slice of other peoples money that otherwise has very little to do with the Irish economy. Here today, gone tomorrow. Next year the multi nationals could decide to reinvest or book their revenue against another jurisdiction offering a tax avoidance benefit. With the imminent demise of the double Irish, exports could take a significant decline - the ultimate aim of other states is to ensure that the revenue generated in their territory is taxed in their territory which is bad for Ireland as we are a tiny market.

The sheer size of the multinational sector compared to the rest of the Irish economy means overall Irish economic figures (such as labour productivity, exports, GDP, etc.) are all significantly impacted by these windfalls in a way that larger economies are not. It is, and has been, damaging to overall economic and fiscal policy because our political classes want to believe they are genius's and so don't bother actually developing or supporting a coherent economic policy.

This is fair comment. However many real Irish businesses are also doing better with the Euro at 77p sterling having been 97p in 2009 and with negligible inflation in Ireland in that period.

Godge

Sand wrote: »

"Exports" in the Irish sense are an accounting trick, highly dependant on tax avoidance strategies by multi nationals. They book profits made abroad against the Irish taxation system, boosting "exports" in a false and misleading way.

Hence Irish exports can climb by 5% when the global economy is slowing. Where the bull**** goes off the charts is where Irish politicians loudly claim this is anything substantial or solid that can underpin actual economic and fiscal planning for years ahead. It is a windfall, we're taking a slice of other peoples money that otherwise has very little to do with the Irish economy. Here today, gone tomorrow. Next year the multi nationals could decide to reinvest or book their revenue against another jurisdiction offering a tax avoidance benefit. With the imminent demise of the double Irish, exports could take a significant decline - the ultimate aim of other states is to ensure that the revenue generated in their territory is taxed in their territory which is bad for Ireland as we are a tiny market.

The sheer size of the multinational sector compared to the rest of the Irish economy means overall Irish economic figures (such as labour productivity, exports, GDP, etc.) are all significantly impacted by these windfalls in a way that larger economies are not. It is, and has been, damaging to overall economic and fiscal policy because our political classes want to believe they are genius's and so don't bother actually developing or supporting a coherent economic policy.

That can all be taken into account when looking at the statistics.

We have seen employment growth, we have seen wages rises in the private sector, we have seen a fall in social welfare recipients, we have seen a rise in income tax revenues. Because of all of that, we don't need GDP figures to tell us the economy is doing well.

Sand

ardmacha wrote: »

This is fair comment. However many real Irish businesses are also doing better with the Euro at 77p sterling having been 97p in 2009 and with negligible inflation in Ireland in that period.

Oh I agree, my point is that the movements of the MNCs can overwhelm the performance of the "domestic" exporters. The "domestic" exporters can be having a good year, yet overall "exports" can take a huge hit due to the MNCs taking a different tax avoidance strategy. And the reverse is also true.

All economies face this to some degree, Ireland is fairly unique in that it has a huge MNC sector attached to an otherwise tiny economy so the effect is much more pronounced. This makes economic/fiscal planning difficult because there is a definite psychological bias towards "good news". There isn't much interest in exploring stats which inexplicably point to Irish workers being some sort of miracle workers in labour productivity. If someone questions it, they'll find life difficult at the Civil Service where they are only interested in good news.

@Godge

That can all be taken into account when looking at the statistics.

We have seen employment growth, we have seen wages rises in the private sector, we have seen a fall in social welfare recipients, we have seen a rise in income tax revenues. Because of all of that, we don't need GDP figures to tell us the economy is doing well.

Can be taken into account, but usually isn't due to political and insider interest pressures. For example, is there really a property supply shortage in Dublin? A few years after a property bubble which collapsed due to an oversupply of property which still haven't been shifted? Or is that NAMA has (quite predictably) put the property market into cold storage? There is the right answer, and then there is the answer the property industry and their political backers want.

We have seen some improvement in unemployment, which is good and encouraging (though wasn't there something about them reclassifying the unemployed?), a fall in social welfare payments (Jobbridge? Emigration?) and a rise in income tax revenue.

I'd describe this as doing better in nominal terms than recent years (which were awful in all terms), and I wouldn't herald the dawn of a new Golden Age as the government is trying to do.

This could just be a gradual return to mean, assisted by the ECB handing out unprecedented amounts of liquidity to fight deflation. Despite that, Irelands debt profile is grim, and the global economy isn't looking too healthy. Germany in particular is certainly not doing all that well - perhaps its short-sighted and stupid policies to cripple its economic trading partners might be re-evaluated when its in their interests. That might be to Ireland's benefit.

Sheldons Brain

Perhaps the atmosphere in which the "double Irish" and similar schemes are being eliminated, or at least reduced, will also have a beneficial effect on Irish statistics.

Kermit.de.frog

Good news eh?

Jumboman

I wonder if tiger kidnapping and bank robberies are included in the economic figures ?

Also with all the recent gangland murders the hitman business must also be adding the economy.

Godge

http://www.rte.ie/news/business/2014/1104/656805-eu-growth-forecasts/

"Ireland will be the fastest growing economy in the European Union this year, according to the European Commission's autumn economic forecast.

The Irish growth rate is expected to be 4.6%, compared to an EU average of 1.3% and a euro zone average of 0.8%. "

"The forecast also suggests that the national debt will fall to 106% of GDP in 2016, down from 123.3% of GDP in 2013."

The debt is coming down very rapidly.

Godge

http://www.rte.ie/news/business/2014/1104/656906-exchequer-october-tax/

and the Exchequer returns are still well above target.

Jumboman

Lets not forget that Diesel laundering is also a massive business providing hundreds of jobs.

If the shinners got into power we would see alot more of this kind of activity.


http://www.rte.ie/news/2014/1104/656790-diesel-laundering-plant/

It said organised criminal gangs are setting up front companies to source and launder fuel, which is then sold through petrol stations they control.
The commissioners estimate the gangs control 150 of these petrol stations all over the country.

Sand

Cliff Taylor asking the obvious question "How can Ireland be growing so fast as Europe slows"

Asks two questions: How come Ireland is expected to grow at three time the rate of our European neighbours?

And if things are going so great, why is consumer confidence *declining*?

Doesn't really figure out the answer. I've already outlined my theory. I think statistics are powerful, when understood and used correctly. It is worth remembering that Robert McNamara placed a lot of value in a statistical analysis of the Vietnam War. Statistically the US was winning the Vietnam War right up until it lost.

zielarz

Rising tax revenues aren't good news, they're actually bad news. It means that government robbed more money and people have less money to spend.

Phoebas

zielarz wrote: »

Rising tax revenues aren't good news, they're actually bad news. It means that government robbed more money and people have less money to spend.

Well that turns conventional wisdom on its head. :rolleyes:

Sheldons Brain

Phoebas wrote: »

Well that turns conventional wisdom on its head. :rolleyes:

And to think that someone thanked that previous post!

Godge

Sheldons Brain wrote: »

And to think that someone thanked that previous post!

It shows the level of understanding of economics on this board.

Sand

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer? Probably not when you consider public sector unions are looking for pay hikes already.

The best an Irish citizen can view those figures with is a grim neutrality. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

Rightwing

Sand wrote: »

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer? Probably not when you consider public sector unions are looking for pay hikes already.

The best an Irish citizen can view those figures with is a grim neutrality. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

I like your analysis of the situation.

andrew

Sand wrote: »

And if things are going so great, why is consumer confidence *declining*?

If you look at the report that article is based upon it shows that consumer confidence has been increasing pretty solidly for the last 2 years. Random ups and downs are a statistical feature of the data series and are almost completely meaningless.

Rightwing

The Water charge crisis is the reason CC is down.

andrew

Rightwing wrote: »

The Water charge crisis is the reason CC is down.

There's no way of knowing that. My guess is sun spots.

Rightwing

andrew wrote: »

There's no way of knowing that. My guess is sun spots.

A guess is right, and it's not something I pay much heed to as consumers are fickle, but:

http://www.rte.ie/news/business/2014/1104/656819-water-plays-role-in-drop-in-consumer-sentiment/
Water charges uncertainty plays role in fall in consumer sentiment: KBC
There was a sharp drop in consumer confidence last month, which economists say is surprising and difficult to explain.
The survey was carried out before the Budget last month, though this did not weigh on sentiment. KBC says its sense is that concerns in relation to water charges could have played a role.
The KBC Bank Ireland ESRI Consumer Sentiment index dropped from a near eight year high of 92.8 in September to 85.5 in October.
KBC says: "We can't find a fully conclusive reason for this deterioration."
Economist Austin Hughes said: "The results are also consistent with many consumers' experience of a recovery that they hear and read to be very healthy but one which they are not feeling in their personal finances."

andrew

"KBC says its sense is that concerns in relation to water charges could have played a role"

Translation: "We're making up something plausible sounding in order to give RTÉ a nice relevant sound-bite"

Rightwing

They know what they are talking about. The way the episode was handled was embarrassing and left a lot to be desired. Uncertainty => everyone hates it.

Godge

Sand wrote: »

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer? Probably not when you consider public sector unions are looking for pay hikes already.

The best an Irish citizen can view those figures with is a grim neutrality. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

Tax revenue is increasing because more people are in jobs paying tax.
Public Expenditure is decreasing because less people are receiving social welfare. That is all good news for everyone.

Nothing at all to do with pay rises or increases in services.

Sheldons Brain

Sand wrote: »

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer?

No. it is matched by a reduction in the deficit.

The best an Irish citizen can view those figures with is a grim neutrality. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

Exaggerate much?

Jumboman

Sand wrote: »

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer? Probably not when you consider public sector unions are looking for pay hikes already.

The best an Irish citizen can view those figures with is a grim neutrality. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

One of reasons Tax revenues have gone up is because of more stealth taxes like the increase in lorry tax to name just one.

Sheldons Brain

Jumboman wrote: »

One of reasons Tax revenues have gone up is because of more stealth taxes like the increase in lorry tax to name just one.

One of the reasons there is global warming is because of the power used to charge my phone, but it is not exactly a material contribution.

zielarz

Sand wrote: »

I'm not going to defend that particular comment, but is the increase in tax revenues matched by an increase in services to the citizen/taxpayer? The best an Irish citizen can view those figures with is a grim neutrality.

Exactly. When a taxpayer is paying more in tax and receiving exactly the same services then he's worse off than before.

Government can't deliver any service effectively. That's a fact. Also, ask yourself who is going to care more about your money, you or the government? Who is going to spend it better? The answer is obvious. For this reason, rising revenues are a very BAD news for Ireland. It means that the government can continue wasteful spending.

chopper6

Sand wrote: »

. No particular reason to celebrate if the rising revenues are allocated to fund pay rises for the public sector best paid for the least results in the developed world.

Dont fiorget the 1.3 billion spent on direct provision for asylum seekers and the 660 million spent on overseas aid.

Rightwing

zielarz wrote: »

Exactly. When a taxpayer is paying more in tax and receiving exactly the same services then he's worse off than before.

Government can't deliver any service effectively. That's a fact. Also, ask yourself who is going to care more about your money, you or the government? Who is going to spend it better? The answer is obvious. For this reason, rising revenues are a very BAD news for Ireland. It means that the government can continue wasteful spending.

Less services.

Rising revenues are good, but meaningful only if the growth in revenue exceeds the growth in costs.

K-9

zielarz wrote: »

Exactly. When a taxpayer is paying more in tax and receiving exactly the same services then he's worse off than before.

We're getting less services with more tax revenues.

But that's all beside the point as the last 6 years (well, I'd say 13 years) wasn't normal economics with the IMF and whatnot. We are trying to repair a structurally unsound economy.

Sheldons Brain

zielarz wrote: »

Exactly. When a taxpayer is paying more in tax and receiving exactly the same services then he's worse off than before.

Nonsense. I hope to pay more tax in the future. I hope to pay more income tax as I have more income, I hope to pay a lot of CGT as I will have a lot of capital gain and I hope to pay a lot of VRT when I buy a Beemer with the proceeds of that capital gain. I hope not to pay too much inheritance tax, as a I plan to spend it all and not die too rich.

Government can't deliver any service effectively. That's a fact.

It isn't a fact, it is a matter of opinion. The reality is that government is suited to providing some services more so than others.

Also, ask yourself who is going to care more about your money, you or the government? Who is going to spend it better? The answer is obvious. For this reason, rising revenues are a very BAD news for Ireland. It means that the government can continue wasteful spending.

Let's have more recession, sure this will be painful for everyone, but as long as those nasty PS people suffer it will all be worth it.

Rightwing

Sheldons Brain wrote: »

Nonsense. I hope to pay more tax in the future. I hope to pay more income tax as I have more income, I hope to pay a lot of CGT as I will have a lot of capital gain and I hope to pay a lot of VRT when I buy a Beemer with the proceeds of that capital gain. I hope not to pay too much inheritance tax, as a I plan to spend it all and not die too rich.



It isn't a fact, it is a matter of opinion. The reality is that government is suited to providing some services more so than others.



Let's have more recession, sure this will be painful for everyone, but as long as those nasty PS people suffer it will all be worth it.

You are not a good ad for corporations like Apple & Google anyway. Shame they don't think like you.

draiochtanois

This post has been deleted.

Rightwing

draiochtanois wrote: »

This post has been deleted.

AIB yes, not so sure about oil price. Have to ask why is it falling? Global growth is pretty weak, so in the immediate future yes it's good, but with longer term consequences.

K-9

Rightwing wrote: »

You are not a good ad for corporations like Apple & Google anyway. Shame they don't think like you.

We should all move to the Caymans or live offshore somewhere, anywhere, as long as it involves paying little or no tax!

chopper6

Rightwing wrote: »

You are not a good ad for corporations like Apple & Google anyway. Shame they don't think like you.

Would this be the same Apple and Google who are under fire for not paying thier way in this economy?

They wont be around here forever,make no mistake.

Godge

Rightwing wrote: »

AIB yes, not so sure about oil price. Have to ask why is it falling? Global growth is pretty weak, so in the immediate future yes it's good, but with longer term consequences.

Good news for oil importing countries, makes them more competitive.

Rightwing

Godge wrote: »

Good news for oil importing countries, makes them more competitive.

There's a bit of a power play going on at the moment between the Saudis and the US...the critical $75 figure. All temporary I suspect.

Jumboman

Rightwing wrote: »

AIB yes, not so sure about oil price. Have to ask why is it falling? Global growth is pretty weak, so in the immediate future yes it's good, but with longer term consequences.

Isis are selling oil for 25 dollars a barrel.

Godge

http://www.rte.ie/news/business/2014/1105/657069-live-register/

The good news keeps on coming, unemployment down to 11%. At the current rate, we will dip below 10% sometime next year.

If only unemployment went down as fast as it goes up.

Rightwing

Godge wrote: »

http://www.rte.ie/news/business/2014/1105/657069-live-register/

The good news keeps on coming, unemployment down to 11%. At the current rate, we will dip below 10% sometime next year.

If only unemployment went down as fast as it goes up.

Still, out of the PIGS, we are the only one making any impact on unemployment. The figures for youth unemployment in Greece & Spain are quite shocking.

ardmacha

Construction has been well below its wrong term trend. I imagine by next summer it will not be and this will bring people into employment. I suspect too the Xmas season may be better than some recent years with consequent temporary employment.

Godge

Rightwing wrote: »

Still, out of the PIGS, we are the only one making any impact on unemployment. The figures for youth unemployment in Greece & Spain are quite shocking.

Really?

http://www.rte.ie/news/business/2014/1105/657095-portugal-jobless/

Portugal is down to 13.1% from 15.5%.

At one time, your posts were a lot more factual and evidence-based, nowadays they seem like throwaway remarks and based on 2010 figures.

Godge

ardmacha wrote: »

Construction has been well below its wrong term trend. I imagine by next summer it will not be and this will bring people into employment. I suspect too the Xmas season may be better than some recent years with consequent temporary employment.

In the last two months I have been surprised at the amount of new construction that has started. Office buildings, houses etc.

Rightwing

Godge wrote: »

Really?

http://www.rte.ie/news/business/2014/1105/657095-portugal-jobless/

Portugal is down to 13.1% from 15.5%.

At one time, your posts were a lot more factual and evidence-based, nowadays they seem like throwaway remarks and based on 2010 figures.

Nonsense. You have to delve deeper to get a true picture.

Portugese youth unemployment is substantially up now (35%) that in 2010 (26%).
Someone getting 3 hours work comes off live register, the figures you quoted, that masks the real figures.

It's youth unemployment that has the EU shaking.