Wednesday 24 January 2018

Ailish O’Hora: Exchequer Return figures follow signs of positivity in economy

WHISPER it, don’t shout it but the latest Exchequer Returns underpin growing signs of improvements on the economic front.

Despite ongoing problems like a stubbornly high rate of unemployment there have been reasons to be cheerful in the past few months.

Today’s Exchequer Returns hold no great surprises but while we are still at the mercy of growth in international markets, as a small export-led economy, earlier indicators have been positive.

The manufacturing PMI has grown for the past twelve months in a row bar a drop in January while even recent Central Statistics Office data on unemployment levels showed  a seasonally adjusted drop in the February unemployment rate to 14.1pc, from highs of 15pc.

The recent deal on the Anglo Irish Bank promissory note and an almost symbolic dropping of the disastrous bank guarantee shortly afterwards point to further reasons to be cheerful but with caveats, of course.

There are still major anomalies and concerns in the economy.

We are told, for example, that the banks are well capitalised.

Yet, Bank of Ireland, which is the closest thing we have to a normal bank, today revealed a huge increase in pre-tax losses to €2.1bn in 2012.

In addition, there are the ongoing concerns about the housing market and those who unable to pay their mortgages, bank debt and retail sales continue to be weak.

And Italy and Cyprus could still scupper that feeling of calmness that has enveloped the eurozone, however tentative it may be.

Having said that, there may be some more good news in the offing.

The Government is still convinced there may be a chance of an extension on our bank debt through longer maturity dates although let’s hope the news, if it comes, will be choreographed with a bit more cop that the promissory note deal was.

Finance Minister Michael Noonan said today he will raise that issue with the International Monetary Fund with chief executive Christine Lagarde when she arrives in Dublin later this month.

(The Minister and Ms Lagarde are good mates, don’t you know. And that can’t be a bad thing)

All things considered, there may be a few more bumps on the road as we aim to tap the open bond markets to raise money in the near future but at least the end of it seems a bit closer than this time last year.

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