EconomyCantillon

Despite multiple global crises, Ireland’s economy keeps motoring on

CSO’s latest Year in Numbers release highlights strength of macro economy

Ireland's economy has overcome a series of potential threats to deliver the strongest period of employment growth in the history of the State. Photograph: Tom Honan

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Sun Jan 7 2024 - 06:00

We are – according to certain sociologists – living in the era of the polycrisis, where multiple, interwoven and mutually reinforcing crises are challenging the way we live. They talk about the world limping from one crisis to the next: the pandemic, the energy shock, wars in Ukraine and the Middle East, rising geopolitical tensions and financial fragility.

And of course the mother of all existential threats, climate change.

What’s perhaps most surprising about the last four years, when these threats and crises have dominated, is the resilience of the economy. Ireland’s macroeconomic performance is a case in point. Despite the threats, the reversals (we can also include Brexit), the 2019-23 era will go down as the strongest period of employment growth in the history of the State.

During those years, 350,000 new jobs were created, bringing total employment in the Irish economy to an all-time high of 2.6 million in 2023, according to the Central Statistic Office’s latest Year In Numbers release.

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The rate of employment hit 74.2 per cent in the second quarter of 2023, the highest point since the current series began 25 years ago.

2023 also saw a rapid decline in headline inflation, the chief macroeconomic threat, with the rate of price growth falling to 3.9 per cent in November, the lowest rate recorded for more than two years and down from the high of 8.5 per cent in February and a peak of 9.2 per cent in October 2022.

Of course, there are problems, not least housing, now the chief driver of intergenerational inequality in Ireland. The median or midpoint price of a home steadily increased over the course of the year from €305,000 in January to €323,000 in October 2023, the latest month for which data is available, and well beyond the means of many on good incomes.

[ Gerard Howlin: https://www.irishtimes.com/opinion/2024/01/05/gerard-howlin-the-young-are-caught-in-a-grotesquely-unfair-trap/ ]

Near full employment combined with bumper tax receipts from the multinational sector has insulated the economy and avoided the sort of reversal we had back in 2010. The challenge now is to use those resources to meet our immediate priorities.

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