The construction industry and consumer spending have replaced net exports as the drivers of Irish economic growth and this is unsustainable according to the National Competitiveness Council (NCC).
In its Competitiveness Challenge (2007) published today the NCC said policy responses were urgently required to "enhance the ability of Ireland's enterprise base to sell goods and services in international markets."
Dr Don Thornhill, chair of the NCC
It says that "in the long run, success in international markets is the only sustainable driver of economic growth." Increased competition from countries such as China and India are also likely to impact on future growth.
Dr Don Thornhill chair of the NCC said it is vital the necessary economic conditions are put in place so that Ireland can sustain our competitiveness.
"We are in a unique position in terms of our past history to address these challenges. We now have more resources for investment."
However he noted that productivity growth rates have slowed, and growth in domestic demand is being financed by high levels of personal borrowing. "The challenge facing us is to reverse those trends, to stimulate productivity growth and regain international market share as key policy objectives."
Dr Thornhill said price inflation in the National Development Plan (2007-2013 could be offset by improving public sector management of projects.
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