Overview of Irish Economy 2013
- Preliminary National Accounts data for 2012 point to positive but moderating output growth in 2012 – real GDP increased by 0.9 per cent while GNP expanded by 3.4 per cent. There was a marked slowdown in export growth last year reflecting a significant deceleration in external demand. However, exports continued to make a positive contribution to overall GDP growth which was sufficient to offset a continued, albeit moderating decline in domestic demand.
- The forecasts for output growth in 2013 and 2014 are similar to those published in the previous Bulletin, but with a slight downward revision to 2013 to take account of a less positive outlook for external demand and a consequent downward revision to projected export growth. The outlook for domestic demand growth has been revised up for both years reflecting some upward revisions to personal consumption and investment. Overall GDP growth is projected to accelerate over the forecast horizon to about 1.2 per cent in 2013 and 2.5 per cent in 2014.
- The performance of Irish exports has proved quite resilient to a significant slowdown in external demand over the last year reflecting the benefits of an improvement in competitiveness and a strong performance from services exports. Nevertheless, the progressive deterioration in the outlook for demand in Ireland’s main trading partners has necessitated a corresponding downgrade in projected export growth, which has been further downgraded in the current projection. A recovery in exports in 2014 is predicated on a corresponding pick-up in external demand from the second half of 2013. The prospects for such a recovery must be treated with some caution, however, given the high degree of uncertainty regarding the near-term outlook for world demand, particularly in advanced economies. Following four consecutive years of contraction, the latest data provide evidence that the decline in domestic demand may be nearing an end. Although down in real terms for the year as a whole, both consumption and investment expanded, albeit modestly, during the second half of 2012. The projections envisage a marginal increase overall in domestic demand this year reflecting a marginal decline in the volume of private consumption and a modest recovery in investment. For 2014, a small projected increase in domestic demand reflects the expectation of modest growth in private demand (consumption and investment) partly offset by continued but moderating fiscal consolidation.
- The pace of employment decline in 2012 eased to its slowest rate since 2008 amid signs of stabilisation in the labour market. Private sector employment has grown modestly over recent quarters and we expect this trend to continue in 2013 giving rise to a small increase in overall employment this year. The unemployment rate is projected to fall gradually towards 14 per cent by the end of the forecast period. The annual rate of HICP inflation for 2012 was 2 per cent. Higher energy prices were a significant driver of inflation in 2012. For 2013, Ireland is expected to import less energy inflation although domestically generated inflation should remain relatively steady. Therefore, inflation should weaken to 1.5 per cent in 2013.
- Competitiveness developments should continue to provide some support to exporters this year, although the less favourable external demand environment places extra emphasis on the continued need for competitiveness improvements. A continued improvement in cost competitiveness along with broader competitiveness gains will enhance the resilience of the exporting sectors in the face of a more challenging external environment.
(Source Central Bank of Ireland)
Irish National Overview
Ireland has a bi-lateral trade with Japan worth approx. €5.03bn and currently enjoys a trade surplus of €1.372bn in manufactured goods (2012) and €831m in Services (2011).
Irish National Exports to Japan (Source CSO 2012/2013)
Irish National Exports to Japan 3 Months to March 31, 2013 (Source CSO May 2013)
Irish National Manufacturing Goods Exports to Japan (Source CSO 2012/2013)
- Japan is Ireland’s 11th largest trading partner in terms of manufacturing exports and is engaged in bi-lateral trade of approx. €5.028bn between Ireland and Japan. However first quarter results
- for 2013 show a decrease of 7.2% in exports to Japan and an increase of approx. 21.6% in imports from Japan
- In addition to a manufacturing trade surplus of €1,373m in 2012 Ireland also has a healthy trade surplus with Japan in International Trade in services of approx. €831m in 2011 (2012 International Trade in Services data is not yet available)
- Irish Manufacturing exports of €2,101m in 2012 to Japan are approx. 20.5% up over 2011 levels of €1,743m.
- International Services Exports of €1,515m in 2011 to Japan are approx. 5.4% up over 2011 levels of €1,437m
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