1. PROF. ALAN AHEARNE

2. Outlook for the Irish Economy
Alan Ahearne
Whitaker Institute, NUI Galway
Presentation at the NWRA Masterclass
25 May 2018

3. “The higher the skill levels of those with whom we interact the more we can learn.”
Robert Lucas, 2015

4. Economy is growing strongly and approaching full employment
Unemployment rate 5.9% (April).
Employment growth 3.1% (Q4).
66,800 net jobs annually.
full-time v. part-time.
more than 2.2 million employed.
Medium-term risks, but near-term outlook bright.
Unemployment rate
(% labour force)

5. Macro policies expected to remain supportive in near term
ECB not expected to raise interest rates until 2019/2020 and then very gradually.
Euro area economy recovering, notwithstanding “soft patch”.
U.S. and global growth robust this year and next.
FDI inflows remain strong.
Strong momentum in domestic demand.
Fiscal policy likely to remain supportive.

6. Accommodating a construction boom?
Economy approaching full employment despite low level of housing construction.
Housing completions (000s)

7. Significant medium-term risks
Brexit.
Increased global trade protection.
International corporate tax reform.
Possible U.S. recession 2020/21.

8. Possible Brexit-related disruptions for businesses in Ireland
Possible new barriers to Ireland-UK trade: tariffs; costs of customs clearance; differences in regulations and standards.
Economic losses likely to be concentrated in Irish-owned SMEs, agriculture and agri-food sectors, and border regions.
Perhaps some impact on FDI-sectors via possible regulatory divergence and disruptions to supply chains.
Possible economic gains from additional FDI and increased access to talent.

9. Regional growth, talent and liveable communities
“… schooling prepares people to take advantage of the ideas of others and the knowledge they gain throughout their careers depends in part on the quality of those with whom they interact. It is the quality of these people–parents, teachers, fellow students, supervisors, co-workers, people we meet at work or at parties, people we observe from a distance, see on television, read about in books–that determines the direction and quality of our lives.” Robert Lucas, 2017

10. Thank you for your attention