Sunday 4 December 2016

Investment in services is 'among lowest in Europe'

Published 22/10/2015 | 02:30

Unite economist Michael Taft said investment is the single biggest driver of economic growth.
Unite economist Michael Taft said investment is the single biggest driver of economic growth.

Spending on public services here as a percent of GDP will rank among the lowest in Europe next year, a conference heard yesterday.

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Irish public investment ranks 26th out of 28 countries at just 2pc of the value of the econony, and even with the Government's capital programme, that figure will remain the same by 2021, trade union Unite said at the Nevin post-Budget seminar.

Unite economist Michael Taft said investment is the single biggest driver of economic growth.

"We should be focusing on long-term drivers of economic growth, especially given that even the Department of Finance has listed all the considerable uncertainties that lie ahead, such as oil prices, interest rates, exchange rates, and also what's going to happen when central banks try to undo their monetary operations," Mr Taft said.

"The IMF has predicted a global recession could hit, if they start raising interest rates. By focusing on the long-term drivers of economic growth, like investment, education and reducing inequality, we would be better able to whether any of those storms coming through."

He said this would have been a better approach than "simply cutting taxes".

John-Mark McCafferty of the Society of St Vincent de Paul said the housing issue was the biggest issue for the Society.

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