Export growth still below IMF targets
Published 06/01/2011 | 05:00
The value of exports hit an all time high last year, but future growth may not be enough to ensure economic growth meets IMF targets, according to a leading trade group.
The Irish Exporters Association (IEA) said Ireland exported €161bn worth of goods and services during 2010 -- an increase of 6.7pc on 2009.
The association is forecasting a 7.2pc increase to €172.6bn this year, but chief executive John Whelan warned the increase would need to be greater to make IMF targets.
The IMF plan of Ireland reducing its debt to GDP ratio to 3pc by 2015 is predicated on a number of assumptions, including some 300,000 jobs being created in the private sector over the next four years.
According to Mr Whelan, the country is on target to create only 200,000 jobs in that time.
"The 2011 projection of a growth of 7.2pc for total Irish exports is still well below the rate of growth in exports required to enable the targets in the IMF four-year plan to be achieved," he said.
For those targets to be met, the underlying export growth rates would have to be in excess of 10pc per annum for the next four years.
"Growth rates of this magnitude would lead to 300,000 new jobs in the private sector and we believe that job creation on this scale is required to support the achievement of Ireland's GDP and tax targets," he added.
Mr Whelan was speaking at the release of the IEA's Year End Review of 2010 where he said he was "unconcerned" by the fact 75pc of exports were made by foreign multinationals.
"These firms are based here, pay tax here, and their staff spend their money here, so that is not a great concern."
Manufacturing exports grew by 6.3pc year-on-year, while exports in the service sector increased by 7.2pc. With GDP continuing to shrink, export output is now worth some 103pc of GDP.
He also called for the Government to bring in a variety of measures to encourage greater export growth.
"We would like to see the creation of 'Special Export Zones' which would allow Ireland to act as a port of entry for emerging economies wanting to enter the EU27 market and we need 'global distribution centres' here," he said.
"Exports of agri-goods grew for the first time in two years last year which is very encouraging," he said, "and this is an area that can grow further with commodity prices rising substantially.
"With quota restrictions being phased out we can expand dairy production by 40pc in the next five years, so it would be a welcome boost to our indigenous export industry.
"In the early stages of the Celtic Tiger we definitely took our foot off the pedal on the agri-food side, but there is scope for growth there and things have really picked up in the past two years."