If world economy rises Irish growth will take off like a rocket, says Noonan

Sat, Mar 17, 2012, 00:00

MINISTER FOR Finance Michael Noonan has given an upbeat assessment of the Irish economy, saying it could grow by more than 6 per cent in nominal terms next year and “take off like a rocket” if the world economy picks up.

Mr Noonan said the Government expected GDP would expand next year by 2 per cent, or 4 per cent including inflation, “but if the world economy takes off, you can put another two-point-something on it”.

Speaking after he rang the morning bell at the NYSE Euronext stock exchange in Paris yesterday, Mr Noonan said the outlook was improving because the Government had in effect overseen an “internal devaluation” of 16 per cent during the crisis by pushing down labour costs.

“We have become so competitive over the period of austerity that if the world economy rises, we’ll take off like a rocket and will have very significant growth rates in the next couple of years,” he said.

Mr Noonan predicted that, with the US “back on track”, China recording strong growth and Europe “stabilising” after the deal on a new Greek bailout, the world was poised for a period of growth.

On the Government’s efforts to secure agreement on a restructuring of its bank debt, Mr Noonan said the next step was to develop what originated as an Irish request into an agreed EU-IMF policy paper. “When we get there, having agreed the terms of that paper, we’ll have a political phase where we will be looking for support for it,” he added.

Mr Noonan painted a similarly positive picture of Ireland’s performance during the period of its EU-IMF rescue programme, telling his French audience Ireland had so far achieved all its targets, including on deficit reduction, and was set to be the most successful of the euro zone’s bailed-out states.

He stressed buoyant exports, attributing that partly to gains in competitiveness. “We have a very strong pro-enterprise national consensus in Ireland,” he said.

The Minister underlined the importance of Ireland’s 12.5 per cent corporate tax, saying it provided certainty to investors and the State. “We want to make sure that that certainty prevails. The 12.5 per cent Irish corporate tax rate is non-negotiable,” he said.

At a meeting with his French counterpart François Baroin on Thursday, Mr Noonan discussed how the French would ratify the EU fiscal treaty, which Ireland plans to put to a referendum this year. The frontrunner for the French presidency, François Hollande of the Socialist Party, has said he would seek renegotiation of the treaty if he were elected.