Ireland remains competitive, but threats to economic sustainability on the rise
Ireland continues to perform well in the three most influential competitiveness indicators, according to the latest Competitiveness Scorecard published by the National Competitiveness Council.
The NCC said that Ireland is ranked 7th in the IMD rankings and ranked 23rd in both the WEF and World Bank rankings.
The NCC said that the economy made large competitiveness gains from 2010 onwards.
But it also pointed to the risks facing the country’s competitiveness, including Brexit and potential changes in US international trade policy.
It said these issues are compounded by domestic issues, including the concentration of the economy on a small number of firms, in a small number of sectors, which leaves it vulnerable to shocks.
The Council noted the risk of overheating – recently highlighted by the Irish Fiscal Advisory Council – but it added that this possibility could change rapidly in the face of an international downturn.
Today’s scorecard report also shows that Ireland also remains a high cost economy.
It said that higher costs, in general, are less of a concern, should productivity levels grow at a faster pace, but the majority of firms here are showing stagnant or declining growth in productivity.
Commenting on his last report as NCC Chairman, Professor Peter Clinch said that with the highest public debt levels in the EU, Ireland is vulnerable in the face of any future crisis.
Professor Clinch said that threats to the sustainability of the economy sit alongside other sustainability issues.
Ireland is on course to fail to meet its 2020 EU commitments for reductions in greenhouse gas emissions, which continue to rise despite decreasing across the EU, he said.
“The Council welcomes the Government’s Climate Action Plan and notes that significant behavioural change will be required for Ireland to come close to meeting its 2030 targets,” Professor Clinch added.
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