Regulator also downgrades growth forecast for economy on back of capacity constraints and tougher monetary conditions
Stoking demand with a big budgetary package, when the labour market is already tight, would have inflationary consequences, the financial regulator warned.The regulator’s warning follows similar ones from the Irish Fiscal Advisory Council and the Economic and Social Research Institute. The council in particular said earlier this month the Government risked undermining its credibility and repeating past mistakes if it breaches its own spending rules each year until 2026.
“The Government’s Summer Economic Statement, and the potential for additional stimulus over and above the SES parameters on budget day, indicates a procyclical shift in the fiscal stance relative to previous plans. This would amplify demand in an economy already operating at capacity, and risks leading to inflation being higher in Ireland for longer than would otherwise be the case.
“Growth rates in the domestic economy, which were always going to ease from their post-pandemic surge, are expected to slow further as capacity constraints have become more binding,” it said. The slowdown in demand internationally resulted in a more “muted” export performance in the first half of 2023, it said.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
NatWest to examine Irish unit over small business loansUK bank tells regulator of ‘remediation’ plans to explore Ulster Bank customers’ allegations
Read more »
Global trading weak as investors gear up for central bank meetingsIt was a weak day of trading across the board on Monday, with traders saying Ireland’s stock market was comparatively weaker than Europe.
Read more »
Bank account options if I want to save money for my grandchildQ&A: All the banks offer parents, and sometimes grandparents, accounts to save for young children; they just don’t say much about them
Read more »
Government considers means-tested support for mortgage holdersMinister of State Niall Collins says scheme may be introduced in response to latest interest rate rise by the European Central Bank
Read more »
Don’t bet on ECB rate cuts in first half of 2024, warns governing council emember Martin KazaksLatvian central banker says wage growth hasn’t peaked
Read more »