Thursday 22 February 2018

Heal wounds and embrace optimism

Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins
Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins


The famous US baseball player, Yogi Berra, perhaps better remembered for expressions, or turns of phrase that were memorable because they did not make sense, once said that predictions were difficult to make - especially about the future. His unintended wisdom should be especially borne in mind when it comes to the dismal science of economic forecasting. That said, the latest quarterly bulletin from the Central Bank is welcome and a cause for general optimism, not least the bank's upgraded headline growth for the economy of 4.4pc this year and the expectation that an additional 89,000 jobs will be created over the next two years, bringing total employment to a record 2.3 million.

The bank's analysis is anecdotally widely evident for almost all to see. So when it says that evidence from a broad range of domestic spending and activity indicators is that the domestic side of the economy is growing at a solid pace, we can concur. This strength in domestic activity has been underpinned by strong and broad-based growth in employment, which in turn has boosted incomes and supported the growth of consumer spending, while some key domestic components of investment, such as building and construction, have also grown strongly.

While there are, and will remain, arguments about whether the world is too complex for people to find the tools to understand political or economic phenomena, let alone predict the future, it is difficult to ignore the many little things around us that point to a growing economy.

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