Tuesday 28 February 2017

Only risk to economic recovery is now political - and it's a definite danger

With a general election now less than one year away, political instability looms - and that could spell disaster for Ireland's fortunes

Dan O'Brien

Dan O'Brien

'Those who say that this could allow for a stable and effective government point to the first administration of Bertie Ahern from 1997. It depended on four Independents. It lasted five years and never came close to collapse'
'Those who say that this could allow for a stable and effective government point to the first administration of Bertie Ahern from 1997. It depended on four Independents. It lasted five years and never came close to collapse'

Assessing the state of an economy at any given time is not straightforward. As is the case with a person's health, there is no single test that can tell that all is well. Just as medical check-ups involve doctors testing for a broad range of things in order to get an assessment of the person's general health, so it is with economies.

What is happening in the different sectors - services, industry and agriculture; in the labour market; in the financial system; and in the public finances all tell part of the story. So, too, do surveys that try to capture confidence levels, be it among consumers, investors or folk at the corporate coalface. The many measures of competitiveness are also to be watched to allow an assessment of an economy's general fitness levels.

Only when all of these indicators are assessed in the round can one make a stab at assessing the momentum in an economy at any given moment.

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