1 / 35

October 3, 2013 12th Annual IUA HR Conference ~ Ag Breathnú Romhainn ~ ~ Looking Forward ~

Economic and Fiscal Outlook John McHale National University of Ireland, Galway Irish Fiscal Advisory Council. October 3, 2013 12th Annual IUA HR Conference ~ Ag Breathnú Romhainn ~ ~ Looking Forward ~ . Overview. Economic outlook Fiscal outlook Implications for higher education sector.

abie
Download Presentation

October 3, 2013 12th Annual IUA HR Conference ~ Ag Breathnú Romhainn ~ ~ Looking Forward ~

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Economic and Fiscal OutlookJohn McHaleNational University of Ireland, GalwayIrish Fiscal Advisory Council October 3, 2013 12th Annual IUA HR Conference ~ Ag BreathnúRomhainn ~ ~ Looking Forward ~

  2. Overview • Economic outlook • Fiscal outlook • Implications for higher education sector

  3. Economic outlook

  4. Dealing with a crisis Bank Bailout Costs Banks Public Finances Lost Credibility of Guarantees Budgetary Costs Asset Values Credit Availability Austerity Real Economy

  5. Real aggregate activity

  6. Real aggregate activity

  7. Components of domestic demand

  8. Retail sales

  9. Real exports and imports

  10. Employment developments

  11. Fiscal outlook

  12. Crisis → Massive debt shock Source: Central Statistics Office

  13. And a large underlying deficit

  14. Deteriorating creditworthiness led to the need for a bailout Source: Datastream

  15. A huge fiscal adjustment has been required

  16. Is austerity working?

  17. A difficult balancing act • Recognition that fiscal adjustment measures will slow the economy in the short run • Key question: Is austerity working to stabilise the public finances and restore the creditworthiness/borrowing capacity of the State?

  18. Actual vs. counterfactual: The primary deficit

  19. Actual vs. counterfactual: The overall deficit

  20. Actual vs. counterfactual: The Debt/GDP ratio

  21. Significant improvement in creditworthiness Source: Datastream

  22. On track to bring the deficit below 3% by 2015 . . . but uncertainty remains

  23. Should we proceed with planned adjustments? • Current plans are for additional adjustments of: • €3.1 billion in 2014 • €2.0 billion in 2015 • Risks around growth mean it is wise to continue to plan for these adjustments • Possible scope to relax plans as the picture becomes clearer • Hard-won credibility would also be put at risk by not following through on planned adjustments

  24. Light at the end of the tunnel?

  25. Distributional effects of the crisis and the policy response

  26. Impact of the crisis on inequality Source: OECD

  27. Distributional effects of Budgets, 2009-2013 Cumulative Percentage Change in Disposable Income Source: ESRI

  28. Evolution of inequality over the crisis Source: CSO, Survey of Income and Livings Conditions

  29. Implications of the adjustment for Education

  30. Significant reduction in pay bill and numbers

  31. Education sector is second largest employer

  32. But strong demand pressures

  33. Education spending is falling Source: DPER, Databank

  34. Higher education taking a disproportionate hit Source: DPER, Revised Estimates

  35. Final thoughts • How can the third-level sector defend its research mission? • Current model focused on discrete outputs for industry • Patents; start-ups; PhDs . . . • Might be better to focus on a human-capital model • Research-based teaching → Equip graduates with the analytical skills to work at the technological frontier

More Related