Ireland Six Years After Crisis, Emerald Isle Is Wearing the Green – But Not Rolling In It

Ireland’s Better – Not Great  Growing Faster than U.S. – GDP Rose 4.8% in 2014 v. 2.4% in U.S.  Unemployment is Still 10.1% -- U.S. is 5.5%  Both Economies Hiccupped in 4 th Quarter Sources: CIA Factbook, Eurostat, Bureau of Labor Statistics, Irish Central Statistics Office.

Ireland’s Recovery Is Different than in the U.S.  Investment is Growing Faster There  +11.3% in 2014 – Ireland  +5.9% in the U.S.  But Irish Consumers Aren’t Spending Much  In late 2014, U.S. consumption rose 4%/year  In Ireland, consumption grew just 1.3% Data: Irish Central Statistics Office, U.S. Bureau of Economic Analysis

Beer, Housing, Wages – All Depressed  As in U.S., Wage Growth is Slow but Low Inflation Helps  Inflation. -0.1% in U.S., -0.6% Ireland (Year Ending Jan. 2015)  Wages: 1.7% U.S., 1.7% Ireland (Year Ending December)  Home Prices Fell By Half, Versus About One-Third in the U.S.  And rose 8% last yearrose 8% last year  What is there to life?  Irish Beer prices still down 10% from 2009Beer prices  But Beer’s Up 9.6% Since 2012 Sources: Federal Reserve, Bureau of Labor Statistics, CSO

Ireland’s Biggest Exports – Not What You think  Exports, Like Investment, Lead Ireland’s Recovery  It’s Not Guinness – Which is Made All Over the World  About a third of exports are pharmaceuticals or other medical goods. About 14% is food and drink  Google, Microsoft and Johnson & Johnson are top exporters from Ireland  Sources: Irish Exporters Assoc., MIT, Eurostat, CSO, WSJ

Easing Off Austerity  Ireland is Big Gainer from European Central Bank easing, which helps exports  Irish 10-year bond yield 0.82%10-year bond yield 0.82%  No new spending cuts needed to meet deficit targets, local experts say  Irish Budget Deficit is Smaller but National Debt is Much Larger than in U.S  U.S. Debt = 72.5% of GDP  Ireland Debt= 118% of GDP  Ireland could be vulnerable if Greece falters and creditors get wary Sources: Economic and Social Research Institute (Dublin), Moody’s Analytics, IHS Global Insight, Investing.com

Bottom Line: Better, but Could Still Use a Drink  Unemployment Forecast to Stay Near 10% Through  10.5% 2015,  9.9% 2016  Growth expected to be faster than U.S. for next two years  2015: 3.3% Ireland, 3.1%US  2016: 3.2% Ireland, 3.0% US Quote: “Things are looking up, but in the near term the growth rate is misleading. …The weakness of the euro should really help.” – Diego Iscaro, IHS Global Insight Data:, Origanisation for EConomic Cooperation and Development