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Council Report No.160 – Understanding the Irish Economy in a Time of Turbulence

  • 6 April 2023
  • Topics: Economic
  • Types: Press Releases

 

‘NESC Report on the Irish Economy Says More Action Is Needed to Improve Resilience’

  • As part of its 50th-year work programme, the National Economic and Social Council (NESC) has published a new report, Understanding the Irish Economy in a Time of Turbulence (Council Report No.160).
  • This report details the main forces causing turbulence around Ireland’s economy, notes the key features of economic performance, and highlights specific vulnerabilities around infrastructure, services, and labour constraints.
  • Among the measures recommended by NESC are a new Pensions Reserve Fund, targeted investment and action on housing, increased delivery of clean energy infrastructure, action to make sure work is attractive and rewarding, and removing the barriers to taking up employment.

 

As part of its 50th-year work programme, the National Economic and Social Council (NESC) has published a new report, Understanding the Irish Economy in a Time of Turbulence (Council Report No.160). This report details the main forces causing turbulence around Ireland’s economy, notes the key features of our economic performance, highlights specific vulnerabilities, and recommends new actions in response.

The report outlines the main forces bearing on the economy today, namely the climate and biodiversity emergencies, demographic shifts, geopolitical change, the rising cost of living, and maintaining national competitiveness.

The report outlines a vision of resilience and sustainability for Ireland’s economy, environment, and society, arguing that policy action is needed in three core areas to help ensure that Ireland thrives as it progresses towards this vision: (i) fiscal sustainability and investment; (ii) acting to realise Net Zero; and (iii) making work attractive.

Speaking on the publication of the report, Dr Larry O’Connell, Director of NESC, said:
“Since 1973, the Council has been providing valuable and trusted strategic research, dialogue, and advice to government to help improve policy and guide it through periods of uncertainty. In its latest report, NESC is once again setting out how, in a time of turbulence, steps can be taken to improve the resilience of Ireland’s economy and for the welfare and benefit of all those living in the State. This report highlights both a capacity challenge and a cohesion challenge behind faced by Ireland today”.

According to NESC, a capacity challenge across the economy adds to vulnerability and lowers resilience. The Council points to the constraints in infrastructure, services, and labour, in key areas such as housing, healthcare, childcare, and transport. In addition, a cohesion challenge exists. Unemployment, poverty, weak labour market attachment, low pay and productivity, and precarity of work suggests that there are cohorts which continue to be weakly connected to the enterprise economy.

Among the measures proposed by NESC, are a new Pensions Reserve Fund, targeted investment and action on housing, increased delivery of clean energy infrastructure, and action to make sure work is attractive and rewarding.

For example, in terms of fiscal resilience, the Council believes a new Pensions Reserve Fund could be designed and ringfenced to help meet the investment needs of an ageing population. In the area of action to realise net-zero, the State could work with businesses to increase the proportion of firms that have concrete climate action plans in place. And in terms of making work more attractive, action is needed on job quality and security, and to address barriers to taking up employment (e.g. literacy, early school leaving, costs, disadvantage).

Dr Cathal FitzGerald, who led the research, said the report is extremely pertinent for Ireland at this point in time:
“The main forces bearing on the economy today provide a strong rationale for more medium-term strategic thinking in the policy-system to build a stronger, fairer, and more sustainable Ireland. Given the resilience of our economy during both the COVID-19 pandemic and the war in Ukraine, responding to turbulence can and should be approached with confidence in the years ahead. Nevertheless, there are challenges and vulnerabilities that will continue to exist unless they are addressed with determination and future-focused solutions”.

 

The full report can be viewed here.

 

For further information, contact:
Dr Cathal FitzGerald, Senior Analyst
e: info@nesc.ie
t: 01 8146331

 

NESC AT 50 – Celebrating 50 Years of Providing Research, Dialogue and Advice
The National Economic and Social Council (NESC) is celebrating 50 years of providing expert, trustworthy, and impartial advice to the Taoiseach and Government on strategic policy issues relating to sustainable economic, social, and environmental development in Ireland. To mark its 50th Anniversary, NESC will be hosting a full-day, in-person conference in the Printworks, Dublin Castle, on 23rd November 2023.  We are currently finalising the programme and will announce further details in due course. See here for more information.

If you wish to receive updates on this and other events, as well as news items throughout the year on the Council’s work, you can subscribe to our mailing list here.

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