Irish economy still strong, apparently...

TheBear

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From The Irish Times: (Subsrciption required, unfortunately)
  • The Irish economy is showing no signs of slowing down despite increased inflation, according to new figures published by the Central Statistics Office (CSO).

    Growth was powered by strong consumer spending - the personal consumption of goods and services - which increased by 6 per cent on the same period last year and by capital investment which was 11.1 per cent higher than in the first quarter of 2005.

    Today's figures show that Ireland's GDP rose by 5.8 per cent in the first quarter of the year while GNP increased by 7 per cent in the same period.
When trying to find non-subscription sources for this story, I came across a story about ISME's calls for action on inflation on BreakingNews.ie. In this second story, ISME seems to either contradict the first report, or to simply ignore its findings.

Is the end nigh? Are we due a soft landing? How do p.ie users interpret the differences between the two announcements, and what is the course of action the government should follow?
 


zakalwe

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Initially i was sceptical of the ISME announcement as inflation is out of the hands of the government.

there is only one way to combat inflation - contract the money supply.

to achieve this you have to use:
a) monetary policies - issue less money, purchase govt bonds, increase interest rates, none of which the irish govt can do.
b) fiscal policies - use tax as a method of contracting the money supply.

a) is out of the govts hands when i ceded monetary control to the ECB and b) is political suicide.

however, it may be possible to reduce public spending to decrease inflation. this is similar to the US Republican policy of "starving the beast" (as apposed to the democrat policy of "taxing and spending"). however, i think our beast could do with some weight loss as it has grown fat from its bite of the celtictiger (i hate that term!). i would not like to see "starving" ala the US Neocons with the cutting of estate taxes and spending on medicare/medicaid. i would like our money was spent more efficiently, how much of (christ, i'm quoting enda now!) of taxpayers money was squandered on decentralisation, on benchmarking (benchmarking against percieved rather than actual private sector wages), on project overruns (port tunnel, luas, bertie bowl and now the metro), and on promising smartly uniformed dustbin men who bag your trash for you and even wash your car (see simpsons - trash of the titans, my favorite episode!)

a certain amount if inflation is necessary, even good, for the economy. i take it the ISME would like their sales prices to rise at less than 3.9% as well as their costs.
 

Jippo

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zakalwe said:
...this is similar to the US Republican policy of "starving the beast" (as apposed to the democrat policy of "taxing and spending"). however, i think our beast could do with some weight loss as it has grown fat from its bite of the celtictiger (i hate that term!). i would not like to see "starving" ala the US Neocons with the cutting of estate taxes and ...
What type of 'speak' is this: it's cool!!
 

hiker

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There is a lot of good news out there thats just not filtering thru.

See here and here and here and here and here

There is a lot of decent good news underlaying all our pessimism.
 

Jippo

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hiker said:
There is a lot of good news out there thats just not filtering thru.

See here and here and here and here and here

There is a lot of decent good news underlaying all our pessimism.
We have the be one of the least optimistic nations on Earth. There was a woman in work the other day who was complaining that the water out of the tap was too hot; she said that she returned to Ireland after 15 years and the place was gone mad, and we never had water that hot before.... :roll:
 

hiker

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Jippo said:
hiker said:
There is a lot of good news out there thats just not filtering thru.

See here and here and here and here and here

There is a lot of decent good news underlaying all our pessimism.
We have the be one of the least optimistic nations on Earth. There was a woman in work the other day who was complaining that the water out of the tap was too hot; she said that she returned to Ireland after 15 years and the place was gone mad, and we never had water that hot before.... :roll:
:lol: :lol:

You know Jippo, it might explain our(the PDs) low figures in elections. We only have optimists in our party. :)

All the whinging b*stards vote for Lab/SF/FG/FF etc etc :lol: :lol:
 

Jippo

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May I?

hiker said:
Jippo said:
hiker said:
There is a lot of good news out there thats just not filtering thru.

See here and here and here and here and here

There is a lot of decent good news underlaying all our pessimism.
We have the be one of the least optimistic nations on Earth. There was a woman in work the other day who was complaining that the water out of the tap was too hot; she said that she returned to Ireland after 15 years and the place was gone mad, and we never had water that hot before.... :roll:
:lol: :lol:

You know Jippo, it might explain our(the PDs) low figures in elections. We only have optimists in our party. :)

All the whinging b*stards vote for Labour/SF/FG/FF etc etc :lol: :lol:
 

morryah

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Hear hear. We are in a period of unprecedented prosperity and some fools still want to change the government. Kill the golden goose, why don't cha.
 

Opus

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Hi gang,

So some 96% of the population are b*stards (and by logical extension pessimists) then eh?

Funny that, I wonder will that sentiment be in your election leaflets over the next 12 months or so? It's sure to win you loads of votes! :roll:

Jeez, the self-congratulatory tone of this thread is hard to take - to quote Mayor Quimby, "I need a drink and a shower!"

Regards,

Opus.
 

Jippo

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Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
I thought more of you Opus. The above is a perfectly rubbish statement.
 

Opus

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Hi jippo,

Jippo said:
Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
I thought more of you Opus. The above is a perfectly rubbish statement.
Is it then? How would you qualify hiker's previous statement so?

Asinine perhaps, or simply moronic?

If it's a joke (which I'll assume is the answer and the whole thread was a wind-up in the first place), it's in pretty poor taste to be honest with you. It really doesn't show the PDs at their ahem "analytical" best.

I tend not to call people who vote PD as b*stards whether in jest or not, but hey, I'm sure you're thinking I'm a stick in the mud and sucking the life out of this "thread".

It's a nice day, go off and take a walk - trust me, you'll feel better!

Regards,

Opus.
 

Jim84

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Jippo said:
Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
I thought more of you Opus. The above is a perfectly rubbish statement.
So did I... I assume you meant 97% of the population
 

Opus

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Hi Jim84,

Jim84 said:
Jippo said:
Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
I thought more of you Opus. The above is a perfectly rubbish statement.
So did I... I assume you meant 97% of the population
Apologies, I was going by the PD's last GE result which was a small but perfect 4%. I should have made myself clearer though! :wink:

Regards,

Opus.
 

Jippo

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Opus said:
Hi Jim84,

Jim84 said:
Jippo said:
Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
I thought more of you Opus. The above is a perfectly rubbish statement.
So did I... I assume you meant 97% of the population
Apologies, I was going by the PD's last GE result which was a small but perfect 4%. I should have made myself clearer though! :wink:

Regards,

Opus.
Seriously I'm not going to bite this..ffs we don't even run candidates in most consistuencies.
 

hiker

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Opus said:
Hi gang,

So some 96% of the population are b*stards (and by logical extension pessimists) then eh?

Funny that, I wonder will that sentiment be in your election leaflets over the next 12 months or so? It's sure to win you loads of votes! :roll:

Jeez, the self-congratulatory tone of this thread is hard to take - to quote Mayor Quimby, "I need a drink and a shower!"

Regards,

Opus.
Hi Opus.

Sure we wont win any votes :lol:
Remember, we are going to be wiped-out, obliterated, wiped off the face of the earth, etc etc etc. (if I've missed any clichés, you can fill 'em in)

Run along and be miserable somewhere else, please. :wink:

regards

Hiker.
 

Jippo

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Opus said:
So some 96% of the population are b*stards (and by logical extension pessimists) then eh?
Basically Opus, your logical extension is flawed.
 

eurocrat

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TheBear said:
How do p.ie users interpret the differences between the two announcements, and what is the course of action the government should follow?
Well in fairness there is a definte link between high growth and high inflation. What I find interseting about this quaters results is that GNP grew at 7% which is a tremendous preformance. GDP rose by 5.8%.

Gererally, GDP had grown faster than GNP over the past 10 years.

As hiker says, there are plenty of positives about the Irish Economy. We should not confuse warnings or concerns about th economy with steadfast prediction of a bust. - which I have never seen.

Economists are obliged to point out weaknesses. There is not an Economy in the world that does not have some weakness. Ireland's weakness maybe be property inflation and debt. Germany's is unemployemnt and stagant growth.

The prophets of doom have been around Ireland for the last 12 years telling us that it will all end in tears. Those folks have been proved very wrong since and it is hard to take them seriously now.
 
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As Julius Caesar said: The general who rests on his laurels, is usually wearing them in the wrong place :)

A report published today suggests that venture capital investment in Irish companies this year, will be below the 2005 level of €200 million.

That's small potatoes compared with the €4-€5 billion that will be invested by Irish investors in commercial property.

The scale of the challenge in developing world class Irish companies is illustrated by the tech sector.

In 2005, the largest Irish tech co. Iona had revenue of $66.8m and lost $0.8m. The second highest revenue was achieved by Trintech at $46.6m and it lost $3.0m; Third highest revenue was made by Datalex at $28.5m and it made a profit of $.06m.

200 of Finland's largest companies have already opened units in China. Its onetime paper company Nokia, has 23,000 employed at home of its total payroll of 60,000.

The danger longterm is not that the property market will collapse but that with up to €100,000 boosting public revenues from every new housing unit built and total property related taxes likely to amount to 18.6% of total government spending this year, more and more will delude themselves into believing that the free lunch has been invented. :x
 

Salthill

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Did the OECD not examine the issue of the impact of a slow-down in construction and/or house prices on the fiscal situation? I think they said that it would cause problems but not be a full-scale crisis.

The points about indigenous industry are well made, but the Finns have a mother and father of an exposure to Nokia do they not?

If one thing seems to be increasingly clear in recent commentary/reports it is that we need government to keep a cushion against a downturn. The auguries are bad on this in light of the possible next governments likely policies. WHile Richard Bruton says that there will be restraint, FG has no problem calling for lots more spending. Pat Rabbitte announced last week in the Dail that Labour stood for significant increases in spending on health annd social services, and his party has condemned surpluses at various stages. Within FF there are also clearly pressures for extra spending.

As for the PDs, it seems their big idea is more tax cuts - really responsible that one.

Let's not be fooled by this stuff about it all being wasted - thios is a convenient way of avoiding saying what you'll fund and how you'll raise the money.

So if we're getting a reasonable consensus on what should be done from a wide range of experts, is there any liklihood of political support for this approach? Do we expect to see demonstrations on O'Connell St demanding restraint in spending? :?:
 
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Salthill said:
Did the OECD not examine the issue of the impact of a slow-down in construction and/or house prices on the fiscal situation? I think they said that it would cause problems but not be a full-scale crisis.

The points about indigenous industry are well made, but the Finns have a mother and father of an exposure to Nokia do they not?
Nokia is important to Finland but the economy is more than a one-trick pony. It accounts for 20% of Finnish exports as Dell, Intel, Pfizer etc do in Ireland. Multinationals made 87% of Irsh exports in 2005.

Both our 2 biggest employers Intel and Dell are currently experiencing significant enough operational problems to worry the markets.

I've extracted the piece below from a recent Finfacts article:

Finland's onetime paper company Nokia, is the world's leading producer of mobile phones. At the peak of the last ICT (information and communication technology) cycle in 2000, Nokia is estimated to have accounted for 2.8 % of Finnish GDP and over 1.6 percentage points of GDP growth. However, following the subsequent slump in ICT, the contribution to GDP growth was only 0.04 % in 2004, with Nokia's share of Finnish GDP little changed at around 3 %. Nokia's exports in total Finnish exports was about 20 % in 2004. Nokia paid around 3 % of total taxes received by the general government. While Nokia accounts for a large share of GDP, exports and R&D, its direct impact on employment is much smaller. Nokia employs 60% of its 60,000 workforce in Europe - 23,000 of them in Finland.

Ireland's largest exporter is US company Dell Computer and in 2005, 87% of Irish exports were made by foreign firms. Dell’s importance to the Irish economy is evidenced by the company’s contribution of at least 5.5 per cent of Irish exports, 2 per cent of GDP and over 4 per cent of all expenditure in the Irish economy. In the financial year ended 30th January 2004, Dell paid €160m in salaries in Ireland. For the financial year ended 30th January 2005, Dell paid €55m in Corporation Tax. It employs more than 4,000 in Ireland.
 


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