OECD Economic Surveys: Ireland

Frequency :
Tous les 18 mois
ISSN :
1999-0324 (en ligne)
ISSN :
1995-3267 (imprimé)
DOI :
10.1787/19990324
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OECD’s periodic surveys of the Irish economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Ireland 2009

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Anglais
Auteur(s):
OCDE
Date de publication :
04 nov 2009
Pages :
133
ISBN :
9789264054547 (PDF) ; 9789264054530 (imprimé)
DOI :
10.1787/eco_surveys-irl-2009-en

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OECD's 2009 review of Ireland's economy.  This edition's special feature covers the labour market in Ireland.
Egalement disponible en: Français

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  • Executive summary
    The Irish economy plunged into a severe recession in 2008, following a period of unsustainable growth. Housing investment has slumped and large internal economic imbalances are unwinding, with the effect on demand compounded by the international financial crisis and global slowdown. The adjustment, which is underway, will be prolonged and the economic recovery weak. Irish banks have come under severe pressure, and major support from the government has been required. The downturn has revealed a weak underlying fiscal position. The authorities have already taken important steps to restore stability, but more will need to be done.
  • Assessment and recommendations
    The Irish economy has slowed very sharply and a severe contraction both by international and historical standards is underway. Housing investment has fallen precipitously. Consumption and business investment are shrinking. The sharp fall in demand results from the unwinding of large domestic imbalances, compounded by the effect of the global downturn in reducing exports and by the international financial crisis. The overall fall in economic activity since the beginning of the downturn will be very large and some of the reduction in living standards is likely to be permanent. The downturn will continue for some time and the recovery is projected to be slow. Just as the boom had an impact on many aspects of the economy, the necessary economic adjustment will have wide ranging and painful consequences. Reductions in wages appear to be taking place and prices are currently falling. Substantial fiscal consolidation, which has begun, is required to bring government revenues and spending into line. In the absence of changes to policies towards the unemployed, high current unemployment creates the risk of sustained high rates of joblessness. Policies are required in the longer term to avoid domestic imbalances on this scale from building up in the future. Without the boost from credit and asset prices, appropriate policies to encourage long-run sustainable growth will be more important for raising living standards.
  • Restoring macroeconomic and financial stability
  • Rebuilding the public finances
  • The labour market: Getting people into work
    The Irish labour market is undergoing a severe adjustment following the sharp fall in output, which has been concentrated on labour-intensive sectors. This has led to a large reduction in employment and high levels of unemployment, despite some outward migration. The labour market in Ireland is flexible in terms of regulation and widespread evidence suggests some reduction in nominal wages is already taking place. But, there is a serious risk that joblessness in the short run will translate into a permanently higher level of unemployment due to the combination of relatively high unemployment benefits for low-skilled workers and, more importantly, weak activation measures. Although some measures have been taken in response to the rise in unemployment, greater encouragement and support should be provided to help the unemployed get back into work and conditionality should be stricter. For the longer run, female participation would be facilitated by removing obstacles in the tax-benefit system; lone parents would be helped by greater support and a stronger requirement to work; and more systematic efforts are required to ensure that disability is not a pathway to inactivity.
  • Boosting competitiveness and raising living standards
    Living standards in Ireland will remain high, despite the severe contraction, but stronger structural policies would encourage sustainable long-run growth. Hard times can be a good time to make overdue reforms and these would also help improve competitiveness. Policies are already favourable to competition in many respects, but market forces are weak in the network industries and parts of the services sector. Prices could be lowered by measures to increase competition. The infrastructure has been upgraded but more investment is needed, although plans in the short term need to adjust in light of budgetary constraints, and the efficiency of infrastructure use could be improved. Ireland has benefitted from past improvements in education. While performance is good, there is scope to improve educational outcomes. Pre-primary education and in-work training should ultimately be increased. Innovation spending has increased rapidly but from a low base. Achieving environmentally sustainable growth is a major challenge and it will be difficult for Ireland to meet its commitments to reducing carbon emissions. While environmental policy has improved, there are significant weaknesses in management of waste.
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