There will be no recession in Ireland, Central Bank assures

In Dublin, Ireland, the Irish Central Bank denies the likelihood of a recession. Even though domestic growth will weaken and inflation will rise next year, the central bank believes the economy will not enter a recession. The Central Bank’s new quarterly bulletin predicts that labor-market growth will continue to be strong.

Inflation is on the rise. The impact on the economy is unavoidable as the phenomenon of rising energy prices continues, but the central bank claims it will not result in a collapse. The labor market continues to be understaffed. On average, only three people apply for each position that is advertised. The current visible vacancy rate indicates that the labor market will continue to be strong. Prior to COVID, the rate in 2019 was six workers for every available job. Despite growing expenses and a predicted downturn in consumer spending, the bank expects most businesses to do all they can to keep employees.

Inflation is predicted to reduce household income this year, but commodity prices will grow. However, the Irish economy will remain unaffected, with employees’ wages anticipated to rise dramatically next year as the labor market continues to expand.

Criticism of the budget

According to the central bank, more than half of the measures in last week’s budget were “non-targeted,” and some of them will drive inflation higher.

In Ireland, 180,000 households earn less than €500 each month. Poor people struggling to make ends meet would require greater assistance if energy and food prices continue to climb, according to the report. The central bank anticipates domestic economic growth will decline to 2.3% next year, 2% lower than the bank’s summer prediction.

Inflation is expected to average 6.3 percent next year, up 2% from the previous forecast.

According to the bank, inflation estimates are quite unclear and largely dependent on what happens with gas prices.

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