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Update: Competitiveness of Irish Economy 4th July 2014

4th July 2014 - Bernard Durkan TD

QUESTION NO: 56
 
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Bernard J. Durkan
for WRITTEN ANSWER on 03/07/2014  
 
 
 To ask the Minister for Finance the extent to which the Irish economy remains competitive in comparison with other countries throughout Europe, both within the Eurozone and without; and if he will make a statement on the matter.
 
REPLY.
 
 
 
 
Substantial progress has been made in recent years to improve the competitiveness of Ireland’s economy.  Ireland’s rate of annual HICP inflation has now been on par with or below that of the euro area average for every month since March 2008. For instance, in 2013 HICP inflation for Ireland was just 0.5 per cent, as compared with a euro area average of 1.3 per cent. This trend looks set to continue in the coming years and the European Commission expects Irish inflation rates to be below those of the euro area average for both this year and next.
 
At the same time, there has also been a significant improvement in Ireland’s economy-wide cost competitiveness. Indeed, the European Commission recently forecast that our nominal unit labour costs will improve by 20 per cent relative to those of the euro area over the period 2008  to 2015.
 
Added to this, the real Harmonised Competitiveness Indicator – which measures the trade-weighted exchange rate as well as relative price developments – has fallen by 22.7 per cent between mid-2008 and end-2013,  indicating a substantial improvement in our international competitiveness.