After two years of double-digit growth, GDP is set to decelerate, with growth projected at 4.4% in 2023 and 3.7% in 2024, as support from exports in multinational-dominated sectors gradually eases. Despite persistent inflation, consumer spending will be relatively strong in 2023, underpinned by significant employment growth and the summer tourist season. Confidence improvements will gradually strengthen business orders and enhance firms’ incentives to invest.
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The Irish economy weathered the COVID-19 pandemic and is coping well with the repercussions from Russia’s war of aggression against Ukraine. While the fiscal position is currently strong, with buoyant revenues, a number of pressures arising from ageing, housing, health, and climate change create fiscal risks in the longer term. Ongoing and planned investments to boost housing supply and affordability and lower greenhouse gas emissions should be accompanied by reforms to reduce regulatory and legal hurdles, uncertainty, and high transaction costs. The government has launched a major reform of the health sector, Sláintecare. Boosting spending efficiency, reducing waiting times and simplifying the interaction of different parts of the system are key to achieve improved health sector performance and sustainability. Moving towards a more integrated system of primary, community and hospital care should be prioritised to increase spending efficiency and the capacity to meet future challenges. Improving data availability and governance as well as financial reporting and management can help track spending and reform implementation.
Improving activation and training policies is a top policy priority, as the pandemic especially affected sectors where many with weaker labour market attachment work. This can also help meet firms’ demand for skills. Reforming the tax and welfare system to remove high effective tax rates will boost participation and employment.
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2021 Structural Reform Priorities