Friday 20 April 2018

Growth figures suggest it's time to start spending

IT would be nice if yesterday's figures on economic growth gave a clear signal as to the right stance to take in next month's Budget. But they do not. Depending on how one looks at them, they could support the idea of encouraging growth by keeping tax rises and spending cuts to the minimum. Equally, they could strengthen the Tanaiste's "austerity hawks" warnings that the situation is much too fragile for any backsliding.

Certainly, the overall growth figures disappoint. It now seems unlikely that the Government's forecast of 1.3pc growth this year can be met. This was already anticipated in the recent OECD analysis, which saw no growth in the economy in 2013.

But inside the figures there are some encouraging signs. Investment was stronger than the headline figure would suggest, once the huge distortion from the purchases of expensive aircraft is excluded.

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