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Celtic Phoenix is a term used to describe the strong economic growth in Ireland since 2014, after the 2008–2013 economic downturn and related banking crisis. The term refers to the concept of a phoenix rising from the ashes of the Celtic Tiger (a similar term applied to a period of growth in Ireland in the late 1990s and early 2000s).[1][2]

Summary

Dublin experienced house prices rising by as much as 40% in 2014.

In late 2013, Ireland exited an EU/ECB/IMF bailout term. In the following year the Irish economy grew strongly, with the construction sector showing signs of recovery in 2014.[3] In total, the Irish economy grew by 4.8% in 2014, making Ireland the fastest growing economy in the European Union.[4]

Other factors such as Quantitative easing, exchange rates and oil prices are also behind the strong economic growth.[5] This growth helped to reduce the Irish national debt to 109% of GDP, and the budget deficit also fell to 3.1% in the fourth quarter of 2014.[6] In April 2015, lobbying group Ibec predicted a growth rate of 5.4% for 2015, building upon the growth from 2014.[7] In April 2015, the unemployment rate fell to around 10%.[8][9]

Property prices increased in 2014, growing fastest in Dublin. This was due to a housing shortage, especially in the Dublin area. The demand in housing helped the recovery in the Irish construction and property sectors as a result of this.[10] Area of Dublin City and South Dublin saw prices grow as much as 40%.[11]

The value of Irish exports soared to a 13-year high in May 2015, due to the weak euro and the boost in competitivesness. Davy Stockbrokers said goods exports are up 17.4pc in the first three months of this year compared to 2014, thanks to a rebound in pharmaceuticals, which are up 21pc on the year.[12][13] Also, as a result of the weak euro, there was a rise in shoppers from the North who came to do their shopping in Border towns, such as Dundalk.[14]

Government response

Budget 2015

Main article: Irish budget, 2015

The budget for 2015 was announced on 14 October 2014 in the Dáil by Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin. It was the first government budget in 7 years to include tax cuts and spending increases.[15]

Noonan outlined the taxation measures with Howlin detailing the spending.[16] The government reversed some of the austerity measures that were introduced over the past six years with extra spending and tax cuts worth just over €1bn.[17][18][19][20]

Spring Economic Statement

Later in April 2015, during a "Spring Economic Statement" (also by the Minister for Finance and the Minister for Public Expenditure and Reform), Noonan and Howlin outlined the government's plans and projections up to the year 2020.[21][22]

The main points announced are listed below:

  • The Government will be in a position to implement expansionary budgets (in which taxes are cut and spending is increased) this year and every year until 2020.
  • There will be scope within the order of €1.2 billion and €1.5 billion to cut USC and income tax while increasing public spening. The measures will be split 50:50 between tax cuts and spending increases with the actual measures to be announced in Budget 2016.
  • Economic growth is forecast at 4 per cent in 2015 with stable growth of 3.25 per cent for the rest of the decade.
  • Employment is expected to surpass 2 million next year with all jobs lost during the downturn to be replaced by 2018.
  • The deficit will fall below 3 per cent to 2.3 per cent of GDP this year with debt levels set to move down towards the European average in the next few years.
  • Net outward migration is expected to cease next year with a return to inward migration from 2017 onwards.
  • By 2021 an extra 3,500 primary and secondary teachers will be needed provide education to an additional 50,000 pupils. The number of third level students is set to increase by 20,000 in the same period.

Reaction

In October 2014, German finance minister, Wolfgang Schäuble said that Germany was "jealous" at how the Irish economy had recovered after the bailout. He also said that Ireland had made a significant contribution to the stabilisation of the euro. [23]

While Taoiseach Enda Kenny praised the economic growth, and said that Ireland would seek to avoid returning to a "boom and bust" cycle, he noted that other areas of the economy remained fragile.[24][25][26]

Some other commentators have suggested that, depending on the Eurozone, world economic outlook as well as other internal and external factors, the growth seen in Ireland in 2014 and early 2015 may not indicate a longer-term pattern for sustainable economic improvement.[27][28][29][30]

The European Commission has also paised the strong economy recovery and growth, but it has warned that extra revenue the Government gets should be used to further reduce the national debt.[31]

References

  1. ^ "Rise of the Celtic Phoenix?". Shelflife Magazine. 16 September 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  2. ^ "Ireland is a spending nation once again as Celtic Phoenix rises". Irish Independent. 24 August 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  3. ^ "Rise of new orders for 'battered' Irish construction sector indicates recovery". Irish Independent. 10 March 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  4. ^ "GDP growth of 4.8% makes Ireland fastest growing EU economy". RTÉ News. 12 March 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  5. ^ "Irish economic growth outpacing rest of Europe, says Ibec". The Irish Times. 13 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  6. ^ "Strong growth sees national debt fall to 109% of GDP". Irish Times. 20 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  7. ^ "Bullish Ibec raises growth forecast to 5.4%". Irish Examiner. 13 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  8. ^ "Unemployment steady at 10% in April - CSO". RTÉ News. 29 April 2015.
  9. ^ "Ireland tops the European poll for reducing unemployment rates". The Irish Times. 30 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  10. ^ "Property prices nationally up 15 per cent in 12 months". The Irish Times. 24 September 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  11. ^ "Dublin house prices rise by a third in 12 months". Irish Independent. 6 October 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  12. ^ "Exports at 13-year high as weak euro boosts competitivesness". Irish Independent. 16 May 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  13. ^ "Value of exports up 21% in March on a yearly basis - CSO". RTÉ News. 15 May 2015.
  14. ^ "Dundalk "booming" again due to euro's fall in value against sterling". Talk of the Town. 26 January 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  15. ^ "Budget Key Points". RTÉ News. 14 October 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  16. ^ "The main things you really need to know from Budget 2015". Journal. 14 October 2014. Retrieved 15 October 2014.
  17. ^ "Budget 2015: Give and take". Irish Independent. 15 October 2014. Retrieved 15 October 2014.
  18. ^ "Budget 2015: as it happened". RTE News. 14 October 2014. Retrieved 15 October 2014.
  19. ^ "Noonan denies budget framed for election". Irish Examiner. 14 October 2014. Retrieved 15 October 2014.
  20. ^ "Budget 2015". Irish Times. 14 October 2014. Retrieved 15 October 2014.
  21. ^ "Expansionary budgets until 2020 are possible - Spring Economic Statement". RTÉ News. 28 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  22. ^ "Spring statement: the main points". The Irish Times. 28 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  23. ^ "German Finance Minister Wolfgang Schaeuble: 'Germany jealous of Irish growth figures'". Irish Independent. 31 October 2014. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  24. ^ "Enda Kenny says Irish economy strengthening but remains fragile". The Irish Times. 28 January 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  25. ^ "No going back to boom and bust, says Kenny". The Irish Times. 9 March 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  26. ^ "Enda Kenny: 2015 is the year of rural recovery". Irish Examiner. 6 March 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  27. ^ "The Myth of the Irish Recovery". CounterPunch. 1 May 2015.
  28. ^ "Celtic phoenix - Ireland's economy emerges from ashes". Australian Financial Review. 17 March 2015.
  29. ^ "IMF sounds warning note over economic recovery". The Irish Times. 2 May 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  30. ^ "Tánaiste Joan Burton warns Ireland's economic recovery is not secure". The Irish Times. 29 April 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  31. ^ "Budget 2016: European Commission warns any extra revenues be used to cut debt". Irish Independent. 13 May 2015. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
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