Government welcomes publication of the NESC’s report ‘Understanding the Irish Economy in a Time of Turbulence’

The government welcomes the publication of the National Economic and Social Council’s report, ‘Understanding the Irish Economy in a Time of Turbulence’.

This new report sets out how, in a time of turbulence, steps can be taken to strengthen Ireland’s economy. It recognises the necessary and successful actions that were taken to deal with immediate and pressing challenges while encouraging the policy-system to take a medium- to longer-term view of economic progress.

The report has four main elements. It begins with an overview of the main forces bearing down on Ireland’s economy today, namely the climate and biodiversity emergencies, demographic shifts, geopolitical change, the rising cost of living, and maintaining national competitiveness.

The report examines important features of Ireland’s enterprise economy. The nature and structure of the enterprise base, its export orientation, the role of foreign direct investment, and enterprise measures, are all outlined under the report. This examination is accompanied by a high-level discussion of competitiveness and productivity.

The report considers challenges and vulnerabilities. NESC highlight the presence and impact of what it describes as a ‘capacity challenge’ across the economy which adds to vulnerability. This capacity challenge includes infrastructure, service, and labour constraints in major areas like housing, healthcare, childcare, and transport.

The Council argues that there is a ‘cohesion challenge’ between the economy and wider society. An analysis of unemployment, weak labour market attachment, and precarity of work suggests that there are cohorts which continue to be weakly connected to the enterprise economy due to these issues.

NESC proposes that having a vision and core lines of action are an essential means of working in this era of turbulence. The Council’s vision is for Ireland to be a sustainable, and thriving net zero economy, environment, and society. The report argues that there are three core areas of economic action and ambition which will help ensure Ireland continues to transition towards this vision:

• fiscal sustainability and investment
• acting to realise Net Zero
• making work attractive

The Council suggest policy actions under each of these headings to help bolster Ireland’s economic success.