In the latest NERI Report Series No. 22, NERI Co-director Dr. Tom McDonnell looks at the Irish economy over the past few years.
The Republic of Ireland’s economy and its labour market have been generally resilient to the variety of external shocks they have faced over the last few years. These shocks include Covid-19 and its associated lockdowns, Brexit disruption, the energy supply shock, the cost of living crisis and decline in real incomes, and the recent turbulence in international financial markets.
The labour market is performing strongly. Employment grew 2.7% and actual hours worked increased 3.9% year-on-year in the final quarter of 2022. Even so, real disposable household incomes declined in 2022. This was because the energy shock triggered very significant inflationary pressures that have outpaced weekly earnings growth. Low income households have been particularly badly affected by the cost of living crisis with a rise in the deprivation rate in 2022.