Monday 22 January 2018

Analysts criticise lack of detail in economic plan

Brendan Howlin, Minister for Public expenditure.
Brendan Howlin, Minister for Public expenditure.
Colm Kelpie

Colm Kelpie

ANALYSTS poured cold water on the Government's medium economic strategy yesterday, saying the plan was more about optics than substance.

Stockbrokers Goodbody said it was disappointed by the lack of detail, while Davy said it was short on any new policy commitments.

The plan was launched by the Economic Management Council, made up of Taoiseach Enda Kenny, Tanaiste Eamon Gilmore, Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brendan Howlin.

It targets full employment by 2020 and a balanced budget by 2018, with growth averaging around 3pc per year.

But Goodbody said there was little detail.

"While reports ahead of its release suggested that the document would be in the style of the troika, our reading is that it is more akin to a Government programme, with much in the way of aspiration and relatively little in the way of concrete policy actions and specific targets to achieve those goals," said Goodbody economist Dermot O'Leary.

Mr O'Leary said that while the growth targets look reasonable, there was disappointment that there wasn't more detail on the specific policy actions needed to achieve the high growth that the Government was targeting.

Goodbody also backed the upbeat assessment of the Irish economy unveiled by the Economic and Social Research Institute. But it said it would reserve judgement until the release of the National Accounts for the third quarter today from the Central Statistics Office (CSO).

Davy also said the Government's strategy was short on any new policy commitments and claimed it was "more optics than substance".

"While the release contained very little of note, the updated fiscal forecasts are slightly more optimistic than April's forecast, with the Government now expecting to run a balanced budget one year earlier in 2018," the stockbrokers said.

"(The) Medium-Term Strategy document contained little of substance, but the symbolic importance of 'sticking to the plan' as the government leaves the bailout cannot be discounted."

It pointed out that the near-term projections were unchanged from Budget 2014 and said the numbers did not appear to be updated for the recent strong employment numbers or the receipts from the sale of the preference shares in Bank of Ireland.

Irish Independent

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