The Irish economy is not growing as fast as it was before the Covid-19 pandemic, according to a respected organization that studies economic issues.
The Economic and Social Research Institute (ESRI) has changed its prediction for how much the economy will grow this year. They originally thought it would grow by 3. 5%, but now they think it will only grow by 1. 8%
It means that the economy is not doing well because of inflation, higher interest rates, and less people wanting to buy certain exports.
But the ESRI said that the economy is still running at full capacity.
It means that there won’t be many people without jobs for a long time.
The ESRI said that despite the usual activity happening within the country and the decrease in international trade, the Irish economy is currently working to its full potential.
Specifically, when talking about industries that require a lot of workers, such as construction, it stated.
The prediction is made before the Irish government’s budget, which will be announced next week on 10 October.
The budget will have €5. 2bn (£44bn) more money for important things and also some extra money to help with energy costs.
Irish Finance Minister Michael McGrath said that there are four main areas that are most important in the budget: the cost of living, housing, competitiveness, and long-term financial planning.
Ireland will have extra money in its budget in the future because it will receive a lot of additional tax money from big international businesses.
Even though the economy is doing well, the group in charge is having a hard time winning support from the public. This is because housing prices are high and public services are stretched thin, causing many people to feel like they are not benefiting from the country’s success.
The job market is doing really well and unemployment has stayed around 4% for the past year. This means that the economy is almost completely providing jobs for everyone who wants one.
The amount of things produced in Ireland is calculated using something called Modified Domestic Demand (MDD).
MDD is a measure that removes the effects of multinational companies from the calculation of Gross Domestic Product (GDP).
Normally, GDP says the Irish economy is growing more than it actually is, but the ESRI said that’s not true right now.
“At this moment, we think that modified domestic demand, which is a better measure of activity within our country, is increasing by 1. 8% in 2023 However, we expect GDP to decrease by 1. 6%”
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