MACROECONOMIC ANALYSIS
OF IRELAND
1.Anshi Manoria- PF2
2.Divyanka Soni- PF2
3.Harshada Raut- PF
4.Jugal Bhanushali- P
5.Neel Pathak- PF222
6.Om Karekar- PF222
NATURE OF THE ECONOMY
Ireland has a mixed economy
The economy is outperforming most other eurozone countries
Connected to the world through transport links to Europe, the UK and
beyond
Major exporters of pharmaceuticals, technology services, and financial
services.
INDICATORS OF ECONOMY IN IRELAND
Ireland ranked third-most competitive country in the euro area
Income inequality has fallen by 8% in recent years
Gross domestic product in 2021 was at about 12.259 USD per capita, GDP is
expected to grow by 7.9% in 2022
Inflation in Ireland was in 2021 at around 2.36%
The corruption perceptions index for the public sector counts 67 and
compared to other countries is moderate
CURRENT ECONOMIC SCENARIO
Still favorable developments despite global headwinds
Employment at record high
High inflation set to persist
Projected budgetary surplus in 2023 amid downside fiscal risks
INCOME DISTRIBUTION
Ireland - Net national income was € 211426.00 Million in
December of 2021
INCOME DISTRIBUTION
€657077
€140830
€31894
GINI INDEX
Gini Index as of Dec 2021 is 26.90%
INFLATION AND UNEMPLOYMENT
Present Inflation
Annual inflation rate 9.2% in October, 2022
Price acceleration of commodities
History
Inflation rate :
High of 23.15% October, 1981
Average of 4.35% from 1976 to 2022
Low of -6.56% in October, 2009
Forecast
Inflation Rate expected to be at 7.70% .
Projected to trend around 3.00% in 2023 and 2.30% in 2024
Inflation Chart of 10 years 2012-22 - Ireland
UNEMPLOYMENT
Present Scenario
Adjusted unemployment rate stood at 4.4% in October, 2022
History
Unemployment rate :
High of 17.30% in December,1985
Average of 10.30% from 1983 to 2022
Low of 3.90% in October, 2000
Forecast
Unemployment Rate expected to be at 5.10%
Projected to trend around 5.30% in 2023
Unemployment Chart of 10 years 2012-22 - Ireland
MONETARY POLICY
Single Monetary policy, introduced on 1 January 1999
Monetary Policy Implementation
The operational framework is set out at follows:
Open Market Operations
Standing Facilities
Legal Documentation
Collateral Framework
Monetary Aggregates
(annual growth rates)
ECB/Euro System policy and exchange rates
Core tasks of the ECB liquidity to the banking system, steering interest
rates in the euro area and issuing euro banknotes.
Key ECB interest rates
The interest rate on the main refinancing operations (MRO)
The rate on the deposit facility
The rate on the marginal lending facility
(interest rate levels in percentages per annum)
Marginal
Date (with Deposit Main refinancing operations lending
effect from) facility facility
Fixed rate Variable rate
tenders Fixed tenders Minimum
rate bid rate
2022 2 Nov. 1.5 2 - 2.25
2022 14 0.75 1.25 - 1.5
Sep.
2022 27 0 0.5 - 0.75
Jul.
18
2019 −0.50 0 - 0.25
Sep.
2016 Mar.16 −0.40 0 - 0.25
2015 9 Dec. −0.30 0.05 - 0.3
IRISH FISCAL POLICY
4 main areas of spending by the Irish government according to their
Fiscal policy-
1. Potential growth of Irish economy and potential growth
2. Labour Market Imbalances
3. Irish Inflation
4. Macro-economic adjustments
CURRENT SCENARIO IN THE IRISH
FISCAL POLICY
Pandemic Unemployment Payment (PUP)
Employment Wage Subsidy Scheme (EWSS)
Government revenue increase threefold but unsustainable
30% Increase in Permanent Core Expenditure
Balancing Government’s Current Expenditures and Taxation
Low interest rate environment
FOREIGN EXCHANGE
The pound was the currency of the Republic of Ireland until 2002
The Irish pound was replaced by the euro on 1 January 1999
The USD/EUR conversion rate is 1.05 (As on 3 Dec 2022)
In October 2022, foreign exchange reserves for Ireland was 11,845.4
million US dollars.
FOREIGN TRADE
Imports
In 2020, Ireland was the world's biggest importer of Unpackaged
Medicaments ($1.32B)
The United States and United Kingdom are Ireland’s chief trading
partners. Other major partners include the other countries of the EU
(notably Germany, France, and Belgium), China, and Switzerland.
FOREIGN TRADE (contd….)
Exports
Ireland is among the world’s leading exporters of computer software.
The principal imports include machinery and transport equipment,
chemicals, petroleum and petroleum products, food products, and
textiles
In August 2022, the top exports of Ireland were Medicinal and
pharmaceutical products (€6.53B), Organic chemicals (€5B), Electrical
machinery, appliances etc., n.e.s. (€1.29B), Essential oils, perfume
materials, toilet preparations.
CONCLUSION
Ranks 3rd most competitive country in the European continent
Country Risk Assessment Score is 96.68
Developed Monetary and Fiscal Policy
Positive trade balance
Inflation seen peaking next month and falling to 2% by the end of
2023'
THANK YOU!!!
1.Anshi Manoria- PF2224-D010
2.Divyanka Soni- PF2224-D020
3.Harshada Raut- PF2224-D023
4.Jugal Bhanushali- PF2224-D029
5.Neel Pathak- PF2224-D036
6.Om Karekar- PF2224-D040
