Ireland: Housing slump fall out

Activity was strong in the first half of 2007, but the slump in house building will slow growth substantially. GNP is expected to increase by 3% in real terms in 2008, which is considerably below the growth rate of potential output, but to recover to grow at 4.5% in 2009 as housing construction levels out at a sustainable level. Inflationary pressures will ease, but unemployment is likely to increase.
Tax revenues partly depend on the property market and will grow more slowly in coming years. Expenditure growth needs to be limited to maintain sound public finances over the medium term. Public investment that eases supply-side constraints should be given priority over current spending, while sharp pay increases in the public sector need to be avoided. Regulatory reforms, particularly in network industries, have the potential to improve competitiveness.

©OECD Observer No. 264/265, December 2007-January 2008

OECD Economic Outlook No. 82, December 2007
All OECD Observer articles on Ireland

Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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