The upcoming weeks’ updated economic and fiscal forecasts will reveal a superior economic performance in the current year compared to 2023, with a rapid decrease in inflation than previously projected, according to Michael McGrath, the Finance Minister. Despite robust tax revenue and a vibrant job market, potential turbulence in the global trade sector might pose risks.
McGrath described the economy as healthy but also recognised that notable international uncertainty and political strains could affect its stability. “Despite these challenges, the economy has demonstrated exceptional resilience, and I expect to see continued robust performance in 2024 and the following years,” he added.
Public spending in the first two months of the year exceeded the government’s targets. However, McGrath attributed this increment in part to unique factors and anticipated a re-alignment of public expenditure with the set objectives. He noted, “Although there was a noticeable surge in spending by the close of February compared to the same period in the previous year, expenses were merely 1 per cent over the projected figure when calculated.”
To explain the first two months’ unexpected spending rise, he identified some specific, one-off factors such as the timing of a double social welfare week in the current year, which was typically observed at the end of the preceding year.
At the end of his weeklong tour to China, McGrath made these remarks in Beijing. During this visit, he engaged with businesses and the wider Irish diaspora in Hong Kong and Shanghai. He also discussed the bilateral economic relationship, valued at nearly €45 billion in 2022, in a 90-minute meeting with China’s finance minister Liu Kun.
China expressed disapproval of the EU’s approach to “de-risk” and its enquiries into Beijing’s subsidies for their electric vehicle sector as protectionist actions. Regardless, McGrath confirmed that Ireland’s stance was consistent with the overall EU perspective on commerce. Yet, he also communicated to Liu that Ireland’s previous experiences with the gains of global trading have shaped the government’s guiding principles.
In his conversation with the minister, the spokesperson stated that Ireland will continue to support and encourage ongoing discussions between the EU and China in hopes of addressing the root of existing tensions. Given how vital trade is to Ireland, the nation is set to utilise its influence to champion continuous interaction and cooperation between the EU and China, with the aim of devising effective solutions to these problems.
He underscored Ireland’s supportive stance towards global trade, whilst also highlighting the need for the EU to solidify its economy, granting independence in the creation of key products and ensuring it can sustain itself in the future. The representative voiced the importance of forming an equitable balance. He emphasized that a favourable trading environment needs to be secured in all directions, particularly amidst increasing uncertainty and political strife.
Recognising Ireland’s significant economic growth garnered through globalisation and the removal of trading barriers, he assured it won’t shock anyone that Ireland will persist in endorsing multilateralism. The nation is keen to engage in discussions on trade-related matters, with an ambition to reduce barriers as much as possible.