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Ireland as a place to do business. November 2010 . Ireland’s fiscal adjustment remains on track. Ireland is acknowledging upfront the costs of rescuing the banking sector. With a worst-case scenario of €50 billion, the cost is high but manageable.
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Ireland as a place to do business November 2010
Ireland’s fiscal adjustment remains on track • Ireland is acknowledging upfront the costs of rescuing the banking sector. • With a worst-case scenario of €50 billion, the cost is high but manageable. • Though the debt-to-GDP ratio will reach about 110-115%, it is bearable and not exceptionally out of line internationally: • US projected to reach 110% by 2015; Italy close to 120% • Greece projected to reach 130% of GDP; Belgium has had high debt burden for decades • Japan’s net liabilities are approaching 150%
Ireland’s fiscal adjustment remains on track • The Irish Exchequer has ample cash reserves and is fully funded through to the middle of 2011. • The Government’s plan from December 2009 is working. • The deficit, excluding the banking costs, is falling and is in line with projections. • Both tax revenue and expenditure are on target. • The economy in the first half of 2010 has performed in line with Government forecasts. • In October, the IMF revised its GDP forecast for Ireland to -0.3% from -0.6% for this year and expects growth of 2.3% in 2011.
Resolute action on public finances Though adjustments for 2011-2014 will be higher than previously anticipated, even in the worst-case scenario Ireland halfway through the process and has four years to complete the task.
Ireland has critical mass in high-tech sectors • Thanks to clusters and networks of multinational companies, Ireland has achieved critical mass in a number of high-tech sectors. • 8 of the top 10 global medical technology companies have manufacturing in Ireland - employment in the sector on a per capita basis is the highest in Europe. • 8 of the top 10 pharmaceutical companies have operations in Ireland. • Many major software and hardware companies have significant operations in Ireland • The cluster of internet-based companies is growing because Ireland is the location of choice. • Business functions located in Ireland are shifting to higher value added activities and are cases becoming increasingly R&D-driven.
The base of indigenous companies is strong • Half of the medical technology companies are Irish • There is a vibrant software sector exporting mainly to the UK and the US. • Ireland has a natural competitive advantage in the food and drinks sector – in fact, Ireland is the largest exporter of beef in Europe and fourth largest in the world. • Indigenous manufacturers are becoming increasingly sophisticated. • Thanks to competitive adjustment achieved to date, Ireland is pricing itself back into international markets.
