1 / 23

Irish Recovery Plan

Irish Recovery Plan. Plan A World Economy Recovers NAMA sorts out the banking crisis Plan B No plan B?. OECD Leading Indicators. Key US Leading Indicator. Can Recovery Be Sustained?. Yield curve slope historically been good indicator of the economic cycle

urania
Download Presentation

Irish Recovery Plan

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. Irish Recovery Plan • Plan A • World Economy Recovers • NAMA sorts out the banking crisis • Plan B • No plan B?

  2. OECD Leading Indicators

  3. Key US Leading Indicator

  4. Can Recovery Be Sustained? • Yield curve slope historically been good indicator of the economic cycle • Recent yield curve flattening raises questions over durability of economic recovery

  5. German Leading Indicator

  6. World GDP Forecasts

  7. Irish Economy • Contracted significantly more sharply than other deficit countries • GDP has posted a 14.5% real fall from peak to trough • Domestic demand down over 26% since Q4 2007 • Exports the one bright spot

  8. Exports key to Irish recovery • Chemicals account for half of merchandise exports • Exports up 6.9% in volume terms year-on-year in H1 • Goods up 4.2% and Services up 10.1% • Ireland has a higher weighting of exports in services (48%) • Dichotomy between “Modern” and “Indigenous” exports • Sterling key to performance of indigenous exports

  9. Still in Deflationary Territory

  10. Domestic demand to remain weak • Building sector out of the equation for next couple of years • House completions to total 10,000-15,000 in 2010/2011 • ‘Conservative’ consumer key to personal spending in the short-term • Estimated €95bn on deposit • Household savings reached €10.5bn (11% of disposable income) in 2009 • Long-term average savings rate = 7%

  11. Housing Output

  12. Consumer Sentiment

  13. Consumer Spending

  14. Labour Market Outlook Critical

  15. Addressing the public finances • Fiscal correction of 5% of GDP in 2009 and 2.5% of GDP in 2010 • Further fiscal correction of at least €4bn (2.5% of GDP) in 2011 • €1bn in capital spending adjustment • Other €3bn in reduced cost of public services and reform of tax system

  16. Issues that need to be looked at • Broadening the tax base • Property tax • Corporation tax? • Water charges • Adjusting welfare rates to make it attractive to work • Containing public expenditure • Privatisation • Stimulating economic activity

  17. NTMA Funding Requirements

  18. Funding Costs

  19. Debt Interest as % of Tax Revenue

  20. History Repeating Itself?

  21. Bloxham: Irish Budget Forecasts

  22. Not All Doom and Gloom • Record merchandise trade surplus in July (€4.2bn) • High percentage of exports in services (48%) • Corporation taxes well above target (€235m) • €95bn in household savings • New car sales (83,500) up 52% year-on-year • Net monthly flow of loans to households positive in August (first time this year) • Redundancies notified (47,600) down 21% year-on-year • Agricultural output (up three quarters running) • Demographics & Diaspora (median age of population is 35 years – lowest in EU)

More Related