Wages to keep growing in Republic, says OECD

Think tank also expects unemployment to keep falling to ‘historically very low levels’

The organisation’s outlook comes days after the State’s Central Statistics Office said that a record 2.3 million people were working on the Republic. Photograph: iStock

The organisation’s outlook comes days after the State’s Central Statistics Office said that a record 2.3 million people were working on the Republic. Photograph: iStock

 

Workers are in line for further pay rises as the Republic’s economy keeps growing, experts predicted in a report published on Thursday.

The Organisation for Economic Co-operation and Development’s (OECD) latest report says that assuming a soft Brexit occurs, the Republic’s wealth will continue growing strongly.

“The unemployment rate will continue to fall to historically very low levels, albeit more slowly, with wage pressures becoming intense,” the Paris-based think tank forecasts.

OECD figures show that pay grew by 3.5 per cent in the first three months of this year and 3.9 per cent in the final quarter of 2018.

Its report predicts that unemployment will fall to 4.6 per cent in 2021 from 5.3 per cent this year.

The organisation’s outlook comes days after the State’s Central Statistics Office said that a record 2.3 million people were working on the Republic.

However, the OECD warns that competitiveness and productivity could suffer if prices rise as employers pass on higher wages.

It also recommends that the Government promote programmes to improve jobless workers’ skills to aid them in returning to the labour force.

Brexit talks

The report cautions that uncertainty over the outcome of Brexit talks remains high while the risk that the UK could crash out of the EU without a deal is not eliminated.

“Similarly, further protectionist trade policies elsewhere could have a substantial and abrupt effect on the Irish economy, given its openness to global trade,” the OECD adds.

Around the world, the OECD says that geopolitical tension, trade conflicts, climate change and China’s sharper-than-expected slowdown, are undermining investment, jobs and incomes.

Laurence Boone, its chief economist, said that many threats to global prosperity were structural.

“Without co-ordination for trade and global taxation, clear policy directions for the energy transition, uncertainty will continue to loom large and damage growth prospects,” he warned.