“Shock after shock” to consumer confidence responsible for lack of spend

GDP growth, running at minus seven per cent in 2009, had become plus one per cent by 2011, albeit mostly achieved through exports according to IBEC Director General Danny McCoy at a recent SFA Conference, speaking on the possibilities for recovery.

Indeed those businesses facing effective demand had “slayed the market” he said. It was the best of times for Irish exporters but those in the domestic economy had a different story to tell.

This was due to consumers simply not spending following shock after shock to their economic confidence.

The economy needs to grow annually by between three and four per cent in volume, he told delegates. Both the lack of employment and our debt burden could be solved by this higher growth figure, he claimed.

“We should, as an economy, have the ambition to run at double the growth rate of the EU – which is not particularly high in the first place. It’s currently one per cent and hoping for 1.5 per cent.”

He also pointed out that of the 230 European ‘regions’, Ireland came 35th in terms of prosperity.

“… A growth of three per cent would push us into the Top 20.”

Balanced economic growth should be the ambition and this is firmly in the hands of consumers, he added.

It should be possible to achieve three per cent annual growth over the next 20 years as we have ‘form’ in this repsect.

“We have the capacity (the infrastructre, the know-how, entrepreneurial spirit and a malleable workforce etc). “Any neutral observer of the Irish economy can see the potential growth rate here,” he said.