Ambassador’s Blog on the Irish economy

Optimism can be an unwise indulgence as it often leads to disappointment. This is especially so in uncertain times like ours. This past five years has been a trying time for Irish people as our country was beset by a series of economic reversals. In the past few months, however, I have noted a succession of positive economic indicators which, taken together, suggest that there are now good grounds for believing that Ireland’s economic recovery is gathering pace.

Those who monitor Irish developments actively will already be aware of this evidence of recovery, but I hope that this short compilation will be of interest to people in Britain who have an interest in Ireland, but do not routinely follow economic announcements from Dublin.

There is every reason for British people to take note of the improved outlook for Ireland as the relationship between our two countries is one of mutual advantage. Just as Ireland benefits from positive developments in the British economy so too can British exporters and investors expect to profit from the Irish economy’s return to growth. Here are some recent Irish economic highlights.

• In the 1st Quarter of 2014, Ireland’s GDP grew by 2.7%.Ireland’s Central Bank is now predicting annual GDP growth this year of 2.5%. Other sources believe that growth may even touch the 3% mark.
• Yields on 10-year Irish Government bonds reached an historic low in August, reflecting international investor confidence in Ireland.
• Unemployment, although still unacceptably high, now stands at 11.2%, down from a peak of 15.1% in 2012.
• Net job creation from inward investment in 2013 reached the highest level for more than a decade. Total employment in the Irish economy rose by 1.7% in the past year.
• Consumer sentiment in Ireland climbed to a seven-year high in July.
• Retail sales were up by 6.5% year on year for Jan–June 2014.
• Tourism numbers rose by 11.1% for the period from May to July 2014. The number of visitors from Britain increased by 14% in the first half of this year.
• The Dublin–London air route is now the second busiest in the world with 3.6 million passengers in 2013.
• The value of goods’ exports increased by 7% in June 2014 compared with the previous year.
• The latest Irish PMI figures point to continuing recovery in the manufacturing, services’ and construction sectors. Ireland’s composite PMI reading has averaged at 60 in recent months. Any figure over 50 represents economic growth. The construction industry is experiencing its first year of expansion since the onset of the recession.
• Exchequer figures to the end of August show that total tax revenue was up 8.4 % on the same period last year and was 4.1% ahead of the Government's budget target.
• Ireland’s credit rating has been upgraded by the three main rating agencies, Fitch being the latest one to do so.
• Forbes magazine ranks Ireland as the best country in the world for business.
• More than 1,000 overseas companies have chosen Ireland as their strategic base in Europe. Ireland now plays host to 8 out of the top 10 global ICT firms, 9 out of the 10 top global pharmaceutical firms, 6 of the top 10 world’s most innovative companies and all 10 of the largest online companies.

I recognise that there is much that remains to be done in completing Ireland’s recovery and creating a sustainable economic future for our country. Relations with our nearest neighbour have a key part to play in this story as the British market is by far the most important one for Irish-owned exporting companies, for our food exporters and for our tourism industry. Working in cooperation with the Irish State Agencies who are represented in London - Bord Bia (the food board), Enterprise Ireland, IDA Ireland and Tourism Ireland – the Embassy’s aim is to do all in our power to promote trade, investment and tourism so as to help create and sustain employment in Ireland.

Daniel Mulhall is Ireland’s Ambassador in London