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Ireland is in severe recession, following several years of high but ultimately unsustainable growth and rising imbalances.
The Irish labour market is undergoing a severe adjustment following the sharp fall in output, which has been concentrated on labour intensive sectors.
Since the last OECD environmental performance review of Ireland in 2000, environmental policies have been improved, environmental institutions strengthened, and significant investments made in environmentally-related infrastructure. However, important challenges remain, such as strengthening efforts to mitigate greenhouse gas emissions and ensuring a better financial viability of water use, warned the OECD Secretary-General.
Living standards in Ireland will remain high, despite the severe contraction, but stronger structural policies would encourage sustainable long run growth.
The fiscal consolidation challenge for Ireland is severe, the underlying budget balance having moved abruptly from surplus to a large deficit.
Speaking at the Institute of International and European Affairs, Mr. Gurría emphasized the OECD’s continued support of the G20, outlining our work on trade and investment, unemployment, and climate change in the wake of the financial crisis.
Following the severe contraction of the Irish economy, Gurría indicated that stabilising the financial system, tackling unemployment, and raising competitiveness will be the main economic challenges for Ireland.
Following the severe contraction of the economy, the main economic challenges in rebalancing the economy include raising competitiveness, restoring the financial system to health, fiscal consolidation and avoiding high long-term unemployment.
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The Irish economy plunged into a severe recession in 2008, followinga period of unsustainable growth. Housing investment has slumped andlarge internal economic imbalances are unwinding, with the effect ondemand compounded by the international financial crisis and globalslowdown. The adjustment, which is underway, will be prolonged andthe economic recovery weak. Irish banks have come under severepressure, and major support from the
Angel Gurría was in Dublin to launch the Economic Survey of Ireland and the conclusions and recommendations of the Environmental Performance review of Ireland, to be published early next year. He also gave a speech at the Institute of International and European Affairs and met several ministers to discuss key policy issues.