Ireland's rate of economic growth remains the most rapid in the European Union, suggesting that 2015 will see a replication of last year's impressive performance when the economy also outpaced its European peers. The economy has been aided by a number of positive external developments: a weak euro has made exports to the US and UK markets more competitive, and greatly boosted overall growth; while low interest rates and a falling oil price have helped to raise consumer confidence and increase consumer spending - as seen in improved retail sales.
Against that encouraging background, unemployment at 9.5 per cent continues to fall and the number of company start-ups continues to rise. According to Vision-net, a credit risk and business analyst, 114 new businesses were formed every day in August. Company failures as measured by insolvencies are declining: last month some 58 companies were declared insolvent, a 46 per cent reduction year-on-year.
The key economic indicators suggests the strong recovery under way since last year is being sustained, and is well supported by a steady improvement in the public finances. Economic commentators are now forecasting a budget deficit below 2 per cent of GDP in 2015. The rapid transformation of the Irish economy largely reflects its position as a small open economy with a very large multi-national sector; one more reliant on developments abroad than at home; on what happens in key markets such as the UK and US; and on the overall rate of global growth. In that regard, one obvious concern is with China – the world's second largest economy and also its fastest growing – and with its efforts to rebalance its economy in order to rely less on exports, and more on domestic consumption. A major slowdown in China could derail the global economic recovery, and have an adverse impact on Ireland.
For the domestic economy, however, the positive effects of the recovery are, as yet, not uniformly spread throughout the country. Dublin has been the main beneficiary of economic growth. But the urban-rural divide has widened, and the regions have been slow to recover. Some emigrants, returning to Ireland on holiday, have in interviews for a recent Irish Times series, highlighted the unbalanced nature of the economic recovery. They have fully recognised the strong growth of the national economy, but found it hard to reconcile this with weak the state of the local economy. There, as one said: "Shops are still closing, no new ones are opening, people are barely hanging on to the jobs". Before that emigrant to Canada might think of returning to Ireland – forsaking a "good pension and healthcare programme" – Ireland's economic recovery would have to be well established, and the job offer a lucrative one. A precondition that many other emigrants also seem likely to set.