| Irish economy to grow fastest in developed world |
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The Irish economy is likely to grow faster than any other economy in the developed world over the next three years a report published by economists at PricewaterhouseCoopers says. The economy is expectedvto show reasonable growth of 3 per cent in 2002, rising to 5 per cent in 2003. This represents almost double the Euroland average growth rages for those years. However, the average budget deficit in Euroland will rise to around 2 percent of GDP in 2002 as growth overall slows to below 1 percent. This compares to a predicted budget surplus in Ireland of 1 percent for 2002. The report is also generally optimistic about prospects for inflation, projecting that this will fall to only around 1.5 percent on average in Euroland in 2002. This should allow the ECB room for further interest rate cuts if there are any signs that the economy is weakening.
The Report further examines the role of the Structural and Cohesion Funds and says that sound National Competitiveness Programmes are key to improved economic Performance in the Cohesion countries ie Ireland, Greece, Portugal and Spain. It adds that concerns over EU Structural Funds should not delay EU enlargement.
Ann O’Connell, Partner, PwC Dublin said, ‘The direct effect of structural and cohesion funds have been modest for Ireland. Several other factors have been identified as contributing to Ireland’s economic success including a combination of stable public finances, strong flows of inward investment, especially from the US, and the Social Partnership have all played an important role along with the opportunities presented by the Single Market. Perhaps the most significant aspect of Ireland’s recent economic success is that it has come at time when the economic importance of the Structural and Cohesion Funds has been falling steadily. This reflects the Irish Government’s success in developing favourable economic and tax conditions’.
Amongst the Cohesion countries, only Ireland has been able to ‘catch up’ with Europe’s economic leaders but the available evidence indicates that the Structural Funds have played only a minor role in this as compared with Ireland’s National Competitiveness Programmes. |
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| Article appeared in the February 2002 issue.
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