In this edition of the Quarterly Economic Observer (QEO), the NERI outlines our expectations for the Republic of Ireland's economy for the next three years. Our projections are pessimistic, highlighting an ongoing economic stagnation as a result of continued contractions to domestic demand, sustained uncertainty at a European level and a related slow recovery of the international economy.
Over the next three years we project:
- annual GDP growth of less than 1% per annum for the next two years and 1.8% in 2015;
- a further contraction of the domestic economy following Budget 2013; and
- a further increase in unemployment in 2013 and 2014.
Given this, the prospect of higher budgetary deficits, larger numbers unemployed, further austerity measures and the contracting domestic economy leads us to question the Government's capacity to reach its fiscal targets in 2015 and to limit the increase in the national debt without significant changes in policy approach as well as improvement in international conditions.
In this QEO we also focus on the nature of Ireland's income distribution and detail the distribution of incomes across households and individuals (section 4). We highlight that:
- 33% of households have a gross income of less than €30,000;
- 56% of households have a gross income of less than €50,000;
- 62% of households have a gross income below the mean household income;
- The top 20% of households have a gross income of more than €80,000 per annum;
- 14% of household have a gross income above €100,000 per annum; and
- 2% of households have gross incomes above €200,000 per annum.
The presentation slides from the QEO launch event (by Dr Micheal Collins and Dr Rory O'Farrell) are available here.