1. HOW IRELAND RETURNED TO THE MARKET
Ireland has met all of its “Programme” targets, will have a primary
budget surplus again in 2014 and is near the top of the growth league
Rossa White, Chief Economist, National Treasury Management Agency
May 24th
2013
1

2. Irish bond market recovery continues in 2013 (yld:
%)
Source: Bloomberg (weekly data)
2

3. Ireland not far from confirming debt sustainability:
primary surplus (% of GDP) to be achieved by 2014
3
Source: Department of Finance; Eurostat; NTMA
In 2014:
Average interest rate on GG debt: 4.1%
Nominal GDP growth: 3.8%
Starting GG debt position: 123% of GDP
Therefore, debt stabilising primary balance: +0.4% of GDP
Ireland’s forecast primary
balance comfortably in line with
debt stabilising primary balance

4. Ireland is the only troubled country to outperform its
Government deficit target for two straight years
4
Sources: European Commission Stability Programme Updates for Ireland (2012) Italy (April 2011) and Spain (April 2011);
Council Recommendation on Portugal’s 2012 National Reform Programme (May 2012); Economic Adjustment
Programme for Greece – Fifth Review (October 2011); Eurostat - Supplementary Tables for the Financial Crisis
General Government Balances ex capital injections to support fin institutions (% of GDP)

5. Growth patterns reveal a faster correction in Ireland
and more favourable backdrop in recent years
5
Source: Eurostat Source: Eurostat
Real GDP Growth (% change year-on-year) Real GDP Growth (% change year-on-year)

6. Ireland is expected to rank among fastest growing
economies in the euro area for 2013 and 2014
6
Source: European Commission

7. A pronounced recovery in competitiveness is visible
even when controlling for changes in the economy
7
Source: ECB Source: Bruegel
Harmonised competitiveness indicators
(CPI deflated, Base: Jan 2002=100)
Note: Data available to Q4 2011 and using fixed weights
from Q1 2008
Real effective exchange rates using fixed
sectoral weights still show marked recovery

8. Labour market improving, driven by private sector
Employment growth for two successive
quarters stems the recent decline
Unemployment rate falls over three
consecutive quarters
8
Source: CSO Source: CSO

9. 9
Household debt burden remains high, yet rising
disposable incomes help to speed up deleveraging
Sources: CSO and Central Bank of Ireland
Note: AGDI = Actual Gross Disposable Income of households

10. New investment will eventually recover, but when?
10
Source: CSO; NTMA