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2020 OECD Economic Surveys: Ireland 2020

image of OECD Economic Surveys: Ireland 2020

The Irish economy has continued to expand strongly, consolidating its post-crisis recovery. Nonetheless, uncertainty remains elevated and legacies of the financial crisis continue to threaten economic resilience. Fiscal prudence is required, given rising fiscal costs from ageing, emerging capacity constraints and international tax policy changes that could weaken tax receipts. The authorities should broaden the property tax and Value Added Tax bases, ensure environmental costs are better reflected in prices and improve the governance around public spending, particularly in healthcare. At the same time, technological change is transforming the Irish economy, leading to new jobs and innovative products that benefit consumers. Further technological adoption by firms will boost productivity if complementary skills in the workforce are cultivated. There is significant scope for greater participation in lifelong learning, which should be encouraged through well-targeted training programmes and ensuring individuals are able to take part, for instance by expanding childcare supply. To ensure the benefits of technological progress for the economy are fully realised and shared, policy settings in other areas, such as competition and the labour market, also need to be revisited.

SPECIAL FEATURE: TECHNOLOGICAL DIFFUSION

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Executive Summary

The Irish economy has been growing strongly. The unemployment rate has plummeted by over 10 percentage points since 2012 to around 5% () and the average real wage well exceeds the OECD average. Moreover, the highly redistributive tax and transfer system has contained income inequality. Air pollution is low and dimensions of wellbeing such as perceived personal safety and community engagement are high.

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