Ireland scores well on growth and GDP but inequality soars
Ireland has been ranked eighth out of the 29 advanced economies for inclusiveness, according to the Inclusive Development Index 2018 from the World Economic Forum (WEF).
The high ranking was driving by a solid performance in growth and development, as well as intergenerational equity and sustainability, according to the report.
Of the three pillars that make up the index, Ireland was ranked 16 for inclusion, ninth for growth and development, and ninth for intergenerational equity.
The report also found that Ireland benefited from a high Gross Domestic Product (GDP) per capita, ranking fourth in its peer group.
In addition, Ireland recorded the second-highest level of labour productivity.
Out of all the advanced economies, the country recorded the largest improvement in its public-debt level, decreasing its public debt by 43pc over the past five years, on the back of what the report described as "a favourable business climate".
In the area of intergenerational equity and sustainability, the country performed above average due to its relatively low-carbon emissions, strong human capital investment, and low levels of environmental damage.
However, the news was not all positive.
While living standards have risen modestly, the country finds itself faced with high income inequality and soaring wealth inequality, with our wealth inequality score increasing by over 10 points in the past five years.
Overall, the report - which took into account country performances over the last five years - found that the 29 advanced economies included in the study have generally flatlined in terms of inclusion, which it measured by median household income, poverty, and wealth and income inequality.
This is despite the advanced economies boosting their growth and development score by over 3pc.
The report, launched ahead of the WEF annual meeting in Davos, found that while advanced economies grew GDP by 5.3pc on average between 2012-2016, economic inclusion grew by only 0.01pc.
The high levels of wealth and income inequality is attributed to decades of prioritising economic growth over social equity, the WEF's report found.
"Excessive reliance by economists and policymakers on gross domestic product as the primary metric of national economic performance is part of the problem," the WEF said.
This is because GDP measures the production of goods and services, rather than the extent to which it contributes to broad socio-economic progress, as manifested in average household incomes, employment opportunities, economic security and quality of life.
Norway was the world's most inclusive economy, followed by Iceland and Luxembourg.
The picture for emerging economies was also worrying, with upper middle income economies growing by 7pc in the period between 2012-2016.
However, inclusion in these economies grew by only 4.6pc, and actually saw a 2.1pc decrease in intergenerational equity.
Lithuania was the most inclusive emerging economy, followed by Hungary and Azerbaijan.
The four indicators that make up the index's growth and development pillar are GDP per capita, labour productivity, employment, and healthy life expectancy.