Analysis > Economy

The real story behind Ireland’s ‘Leprechaun’ economics fiasco

Over the past few days we have learned much about the true story behind Ireland’s so-called “Leprechaun” economic figures. Senior civil servants and ministers were blindsided by the astonishing 26% economic growth figures for 2015 from the Central Statistics Office (CSO) – issued on 12 July. Some of the mandarins found out after the media, who were given the information under embargo 30 minutes in advance of publication at a press briefing. When the statisticians dropped their bombshell last week, ministers …

Screaming in fiscal space

Nobody outside Leinster house seemed to be too bothered by the prospect of the next government (or governments – however many it takes to reach the end of the forecast period in 2021) having an extra €2bn to play with. But it seems they do, thanks to a largely expected expansion of our old friend, the fiscal space. The Department of Finance published a “slimline” version of the Stability Programme Update on Tuesday night, giving the expected update on its …

Protracted political hiatus means bigger borrowing cost

Despite the inconclusive result of the General Election, Ireland’s borrowing costs remain very low at 0.8%. It is not surprising there has been little movement, because it frequently takes some weeks for the markets to digest an evolving situation. There are some reasons to believe that Ireland will be able to avoid ruffling the feathers of investors for some weeks – as long as a stable solid administration is formed. The main political parties stated in their manifestos that they …

Not true to say economic rebound is confined to Dublin

Politicians of different hues frequently assert that the economic recovery is a Dublin-only phenomenon. Last week the Fianna Fáil leader Micheál Martin said as much on the News at One on RTÉ Radio 1. But where is the evidence for this? Last month University College Cork economist Seamus Coffey measured the performance of Cork city and county with the national average. His findings, which were presented at a conference hosted by RTÉ, showed Cork was outperforming. He revealed while employment …

How much of the recovery is due to Government?

The Irish economy is growing quickly. But how much of this is as a result of actions by the Government? Part of the answer to that question lies in examining factors that are beyond the control of ministers and civil servants. The Central Bank reckons Gross Domestic Product, which measures national income, will expand by a remarkable 5.8% this year. One of the big reasons for that rapid turnaround is that international winds are helpfully filling the sails of the …

The strange world of non-tax revenue

How are we going to cope when the non-tax revenue the State has come to rely on starts to wind down over the next few years? This is an important question, and it’s raised by Central Bank economists Ronan Hickey and Diarmaid Smyth in a paper published today in the latest Central Bank Quarterly Bulletin. Non-tax revenue is money that flows into the state coffers from sources other than tax, and it’s rocketed in recent years – going from €0.6bn …

A surprise turnaround as banks return to profit

‘Bailing out the Banks’ has been spluttered out in vexed conversations up and down the country since the full horror of the financial crash became clear. But in the past year something has happened to change the calculations. It once may have seemed a distant and doubtful prospect but now it’s increasingly possible that the State may get back a considerable chunk of the €64 billion bailout. How much money can the Exchequer hope to recover from Irish banks? The …