The Government needs to take a strategic long-term approach to growing the economy argues NERI Quarterly Economic Observer, Autumn 2015.
NERI predicts strong economic growth of 5.9% in 2015 and still robust growth of 4.1% in 2016.
The Nevin Economic Research Institute (NERI) will publish its latest Quarterly Economic Observer on Thursday 24th September. The report forecasts that total employment will exceed 2 million around the middle of 2016 while the general government deficit will improve to 1% of GDP in 2016.
The report argues that policymakers should reconsider the plan to cut the overall level of taxes in Budget 2016 and instead take a more strategic and long-term investment based approach to growing the economy. Tax cuts won’t grow the economy in the long-run and are, in general, likely to increase the wealth and income divide.
NERI economist, Dr Tom McDonnell, said that the economy’s potential to grow depends on its ability to generate productivity gains year-on-year. Yet productivity growth has been on a downward trend for over 20 years. Dr McDonnell noted:
“The best way to sustain growth in productivity over the long-term is to invest in education and skills, in productivity enhancing infrastructure, and in the production and diffusion of new technologies and ideas. Increased investment in strategic infrastructure, in research, and in the early years of childhood would all help to increase the economy’s future productive capacity.”
“Policymakers would also be wise to pursue measures to reduce barriers to labour market entry. Subsidies for childcare and the gradual tapering of family supports along with income would both help to reduce these barriers.” Dr McDonnell added.
Speaking in advance of the official launch of the report in Buswells Hotel, NERI Director Dr Tom Healy remarked:
“The Institute urges the Government to prioritise long-term strategic investment over short-term giveaways such as tax breaks or tax cuts especially where these disproportionately benefit the better off. Budget 2016 must put the emphasis on investment for future prosperity and equality.”
Notes to editor
The NERI (Nevin Economic Research Institute) is a research think-tank on the Irish Economy funded by unions affiliated to the ICTU. It aims ‘to influence policy outcomes that have the greatest effect on the achievement of equity and fairness in the political economy on the Island of Ireland, to the benefit of working people, their families and communities and the enhancement of the quality of life of all people living on the island of Ireland, through the provision of high-quality macro and micro economic research and analyses, awareness raising and capacity building programmes’. The website of the institute is: www.NERInstitute.net
The Autumn 2015 edition of the Quarterly Economic Observer includes assessments of the Republic of Ireland and Northern Ireland economies and their growth prospects.
The NERI will outline the document in a public briefing at 11am in Buswells Hotel, Molesworth Street on, September 24th.
NERI Staff will be available for interview at Buswells Hotel from 10:30am.