Irish economy showing signs of recession – Ibec

DUBLIN: Ireland’s domestic economy has been affected by the economic recession, Ibec observes. The slowdown has already affected the growth rates of consumer spending and investment. This will continue till 2023, according to Ibec’s quarterly financial report.

The report predicts consumer spending growth will slow to 4% from 6.6% next year and domestic investment will slow to 4% from 8.6%. It also points to rising energy costs and interest rates as factors affecting consumer spending. The European Central Bank raised interest rates by 0.5% last week and is tipped to raise it further next month.

Ibec noted that changes in global capital markets and continued energy price hikes are undermining the country’s recovery gains.

Ibec head of national policy and chief economist Gerard Brady said the Irish economy was at a turning point.

“The outlook for Irish business is marked by growing concern at rapid shifts in our competitive position and growing labour market policy costs being imposed by government, which will most significantly impact on SMEs,” said Gerard Brady.

“There is a need to support those exposed to the downside of inflation. These supports should, however, be targeted at those businesses and households which are most in need,” he added.