Latest Central Bank Quarterly Bulletin

The Irish Central Bank is forecasting strong growth in Ireland of about 2% in GDP in the latest quarterly bulletin (.pdf). Pages 20 and 21 should interest readers of this blog. Thomas Conefrey and Suzanne Linehan dig into the employment growth numbers in a useful box-out. As usual the report is a chart fest, which is great for the wonky folk who frequent this site, but this one caught my eye. In the figure below you’re looking at household debt relative to disposable income, but also relative to total assets in the household sector.

What is remarkable is the scale of the problem relative to other developed countries. Irish debt to disposable income is about 196%, UK debt to disposable income is about 140%, US is about 120%. Here’s a really useful paper (.pdf) by Clare Lebartz looking at the distribution of household debt by income distribution which goes into the mechanics of this buildup a bit more.

The other sharp change is the brown line, driven by an increase in household assets mainly.

By Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

7 replies on “Latest Central Bank Quarterly Bulletin”

“The increase
in net worth over the quarter largely reflected
the rise in the value of housing assets of
€12.6 billion”

For some, on paper, etc.

The shape of that decline in household debt looks like it’s going to be some time before things are down to ‘acceptable’ levels. Unless of course the economy ‘takes off like a rocket’ soon…..

@Grumpy, there is a large, and substantial, body of evidence to suggest that Gavin Kostick is the greatest commenter IEblog, or perhaps any blog, has ever seen. Am a huge fan.

A particularly noteworthy feature of the employment recovery has been the extent to which recent gains have been accounted for by the agriculture sector; approximately 32,700 net new jobs have been created in agriculture over the last five quarters.

The rapid expansion of employment within this sector has raised its share of total employment to 6.1 per cent, above both long-term and international norms.

I’m not any wiser on the employment situation on reading the sidebars by Thomas Conefrey and Suzanne Linehan.

Farming is the main category here rather than fishing and forestry and most of us would realise that in the real world, despite the statistics, farm employment did not jump by 41% in five quarters — what percentage of farmers employ staff?

Farming numbers are back to the 2007 level as there was undercounting in the intervening period.

What the economists should have looked at is why self employment without employees in Q4 2013 was as high as it was in late 2007.

The economic backdrop was very different in 2013 compared with 2007 – the question is what is the reality behind the claimed surge in entrepreneurship? How many who are searching for real jobs are counted as self-employed?

Adding the unemployed in activation programs to the official jobless rate would give a jobless rate of 15.8%.

Wonder why income tax receipts are now only in line with a target that was produced when jobs added in 12 mths were at 33,000 rather than 61,000.

At end of 2013, the number of employees in the economy was only up 22,000 compared with 2010.

Did Ireland add 61,000 jobs in 2013?

The bulletin refers to rising services exports and on Wednesday Pascal Saint-Amans, head of tax at the OECD, said that the think-tank will propose that schemes such as the Double Dutch Irish Sandwich one will be axed.

Over €40bn in Irish services exports/ output maybe vapourised.

Just two years ago this month, I suggested that a third of services exports were fake but then, it was still taboo to raise the issue of corporate tax avoidance – it was “talking down the economy.”

It took international attention to raise the risks of facilitating massive tax avoidance.

Only dreamers and fools could believe that all changed, changed utterly post September 2008 – the conservatives of right and left still hold sway.

Did Ireland add 61,000 jobs in 2013?

fyi a wee bit off thread: Mick Clifford sums up the ReHab saga:

‘The entrails of the Rehab saga throw up the same features that have been part of so many of the scandals uncovered since the economic collapse of 2008.

Whether it was in politics, in the semi-state sector, in the private sector — particularly in banking — and now in the charity sector, the same failings are repeated every time.

A culture of entitlement and disconnect from the real world combined to mask basic incompetence in dealing with the issue of feathered nests, once nuggets of information began tumbling out.

Ms Kerins salary first became an issue three years ago when The Phoenix magazine ran a number of articles suggesting that her full package came to around €400,000.

@Michael Hennigan

Agree on those Ag nos. Possibly self employed construction types now declaring themselves back on the ‘bit of land’. AgriFood sector is doing well but doubt employment levels increasing at a high rate. Keep up the ‘realism’.

There is an interesting article over at the FT about an ECB internal paper that reckons 1 trillion euros in QE would generate 0.2 to 0.8% in additional inflation in 2016. By then London house prices could well be 20% higher and Oirish prices could look like good value – the whole circus could be off again.

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