Ireland Economic goals

Ireland has a sizeable, modern economy whose growth is pegged on the vibrant export sector and the construction industry. While the export sector is dominated by foreigners, the growth in the construction industry is fuelled by increased consumer spending and the heavy investment by the private sector. As a result property prices recorded a remarkable growth between 1996 and 2006 thereby exceeding those of other developed economies (Kennedy, 1998). Agriculture, once the most vibrant sector of the economy, has been forced to take a back seat as these two sectors determine the direction of the economy.

The Gross Domestic Production-GDP of Ireland over the last decade has recorded an annual average growth rate of 5.5%. In 2007, per capita GDP exceeded that of the United States. However, this reduced significantly in 2008 to -0.7%. In the same period the inflation rate was at 4%. The months of March and June recorded the highest inflation rate in the year of 5% with the lowest being in December with a rate of 1.1%. The unemployment rate in the year was 6% (Ireland Central Statistics Office, 1997).

This can be mainly attributed to the global financial crisis which has taken a toll on the construction and property markets. The Irish government has nevertheless put in place measures to resuscitate the economy. These include: increased investment in infrastructure, implementing monetary policies which will curb inflation and attracting more foreign direct investment.

The Consumer Price Index-CPI is used to estimate the average level of prices paid for the goods and services consumed by all private households and foreign tourists in a country. Most of the prices are collected monthly, however some are only collected quarterly and others annually. Consumer prices in the month of December, 2008, as measured by the CPI, decreased by 1.2%. In addition the European Union Harmonized Index of Consumer Prices (HICP) decreased by 0.7% (Ireland Central Statistics Office, 1997)..

The most significant changes in the prices of consumer goods and services are as shown below:

−Alcoholic Beverages &Tobacco                                                                              +6.8%

−Health                                                                                                                       +5.8%

−Education                                                                                                                 +5.7%

−Restaurants & Hotels                                                                                                +3.7%

−Food &Non-Alcoholic Beverages                                                                           +3.2%

−Clothing & Footwear                                                                                               -6.5%

−Transport                                                                                                                   -3.5%

−Furnishings, Household Equipment & Routine Household Maintenance                -1.3%

 

 

Reference:

Tullio G., Guitián M., Russo M. Policy Coordination in the European Monetary System.

International Monetary Fund. 1988

 

OECD. OECD Economic Surveys: Ireland 2008: OECD Publishing. 2008

 

Ireland Central Statistics Office. Consumer price index: introduction of updated series: base: mid-November 1996 as 100.  Central Statistics Office. 1997

 

Kennedy K., A, Giblin.T. McHugh. W. The Economic Development of Ireland in the Twentieth Century. Routledge. 1988

 

Aiginger. A., Hutschenreiter. G. Economic Policy Issues for the Next Decade. Springer. 2003