Ireland is the “clear winner” among European economies as the world enters a “troubling” period, according to The Economist magazine.
The assessment is published this weekend by the magazine’s European economics editor Christian Odendahl.
In a feature entitled the European Economic Pentathlon, the publication ranks the EU economies based on “five major challenges” facing all of them. These include demand, debt, demography, decarbonisation and decoupling exposure.
Of all EU economies, Ireland ranks best, according to the magazine. It is closely followed by Malta and Cyprus, and then by Luxembourg and Denmark.
“The idea is to map out the challenges facing all of Europe’s economies… and to see which countries are likely to struggle, and which are not,” said Odendahl.
He noted that “tax havens such as Ireland… have high corporate debt without it affecting the local economy much”, and added that “being small clearly has its advantages”.
The analysis comes despite recent warning by the ESRI that Ireland’s gross domestic product (GDP) will contract as multinational activity slows.
This weekend, Irish economist Mark Henry said the publication’s forecast rings true.
“Ireland has never been better prepared for any downturn. There has never been so many people in jobs, and we are not reliant on a housing boom to fund our public services as we were before the last crash,” he said.
Henry, author of In Fact: An Optimist’s Guide to Ireland, noted that Ireland is “saving sensibly” with last week’s Budget committing to a new Future Ireland Fund.
In addition, Ireland’s income inequality is “lower than in most other European countries”. Although housing remains our biggest constraint, he said “In 10 years’ time, I wouldn’t be surprised if we top The Economist’s table once again.”
However, Irish economist Stephen Kinsella takes a more cautious view.
“It’s mostly smoke and mirrors. They base much of their statistics on GDP, which is a measure of the output of the country each year. Ours is badly overstated by the presence of multinationals…
“Ireland is doing very well in some respects and very badly in others. Sadly, the report doesn’t capture much of that nuance,” he added.
Source : Independent