Ireland’s competitive performance continued to improve over the last year, according to the latest annual benchmarking report from the National Competitiveness Council (NCC).
The Council finds that many facets of Ireland’s competitive performance continued to improve over the last year. Economic growth, improved public finances, trade performance and a strong labour market performance have all contributed to Ireland’s improved international competitiveness.
Today's report notes that the exporting sectors of the economy continue to perform strongly and many of Ireland’s traditional strengths (such as our competitive taxation regime, highly educated, young, labour force, and supportive environment in which to do business) remain. Reflecting this strong economic performance, Ireland moved from 7th to 6th in the IMD’s annual World Competitiveness Yearbook 2017.
However, the Council is concerned that Ireland's strong performance from a macroeconomic perspective is overstating the overall competitiveness position and masking weakness in the underlying drivers of future competitiveness performance and sector specific challenges, particularly related to costs and productivity.
Furthermore, the Council warns that while the overall economic outlook for Ireland is positive, the economy faces significant downside threats, including Brexit, a potential shift in trade and taxation policy in the US, and the uncertain nature of global growth, particularly, the potential for slower than projected growth in the UK and US. The Council warns it crucial that Ireland address these factors within its control.
The Council recommends ensuring Ireland's fiscal position remains sustainable. This includes avoiding any narrowing of the tax base to ensure the tax system supports and rewards employment, enterprise, investment and innovation.
Today's report notes that developing Ireland's infrastructure base, while complying with the EU’s fiscal rules, is a fundamental challenge to enhancing competitiveness. It notes that measures to reduce infrastructure bottlenecks including by improving and prioritising public investment, particularly Ireland's capacity to deliver regionally connected projects in line with the National Planning Framework are essential.
Speaking at the launch of the report, Chair of the Council, Professor Peter Clinch commented, "The competitiveness and consistency of our tax offering, legal, regulatory and administrative environment, cost base, the availability of talent, technology and property solutions will remain vital to our ability to withstand the ebb and flow of global economic developments and external economic shocks."
He added, "While Ireland’s overall economic performance is strong, the economy faces significant downside threats, including Brexit, a potential shift in trade and taxation policy in the US, and the uncertain nature of global growth."
Source: www.businessworld.ie