New Central Bank Quarterly Bulletin

The Bank released its third quarterly bulletin of the year this week (Quarterly Bulletin (QB3 – July 2018). The outlook for growth remains favourable despite significant downside risks.  The economy is expected to grow (in GDP terms) by 4.5 per cent this year and by 4.2 per cent in 2019. Most of the impetus to growth is likely to continue coming from domestic sources with the unemployment rate averaging 4.8 per cent next year on the back of solid and sustained gains in employment.

A number of significant downside risks remain. These predominantly relate to the vulnerability of the economy to external shocks, namely Brexit, further increases in protectionist trade policies and any changes to international tax regimes (that could affect FDI flows). Domestically, while inflationary pressures remain contained, the gradual erosion of spare capacity increases the prospects of overheating. In particular, in the labour market, unemployment is fast approaching levels that in the past have triggered an acceleration in wage inflation.

Aside from the normal outlook for the economy, the Bulletin contains a number of Boxes on a diverse range of topics. These include pieces on the National Accounts, a new economic indicator, trade, inflation, credit and debit card returns and mortgage arrears. The Bulletin also has a signed article that looks at Irish Government investment, financing and the capital stock.


  • International economic outlook (Box A – page 13)
  • Revisions to the CSO National Accounts (Box B – page 15)
  • A new monthly indicator of economic activity (Box C – page 21)
  • Irish exports and world demand (Box D – page 29)
  • Consumer prices in Ireland (Box E – page 38)

On the financing side of the economy, there are pieces on:

  • Credit and Debit Card Return (Box A – page 51)
  • Mortgage Arrears Statistics (Box B – page 59).

Signed Articles

The Bulletin includes a signed article by Hickey, Lozej and Smyth (2018), on “Irish Government Investment, Financing and the Public Capital Stock

One reply on “New Central Bank Quarterly Bulletin”

Given the decade that people have been through this continuing evidence of solid economic performance is very welcome – even if one might feel a bit queasy about some of the foundations and the funding and process of re-distribution. (I never met a risk that wasn’t down-side. But then, I suppose, an up-side risk reflects the probability of a windfall gain.)

The additional analyses in the boxes continue to be very interesting and enlightening. But I am intrigued by the focus of the analysis of consumer prices in Box E. One gets the impression that the significant fall in the price index of Non-Energy Industrial Goods (NEIG) is viewed as being a bit concerning and deserves further investigation. The reality, of course, is that it is an unalloyed good thing. The gap between the Irish and the EA indices (Box E, Fig. 1), averaging 130 and 95 (approx. & resp.) in the first decade of the century reflects the extent to which Irish consumers were ripped off (or economic rents captured) and it would be surprising if increased competition, new entrants, forced price-cutting during the recession (coupled with an inability to increase prices subsequently during a slow and lengthy recovery) and increased on-line purchasing haven’t contributed to the fall in the Irish index. But, instead of investigating the impact of these factors, the focus is on the impact of other factors which have contributed, but don’t tell the full story. I suppose a bit more analysis would be out of the question.

It’s not surprising that the capture of economic rents continued unabated in the more sheltered sectors where there was no effective competition (or it was replaced by tacit cartellisation and deliberately ineffective economic regulation) and prices have continued to increase. In aggregate the drop in prices in the less sheltered sectors has dampened increases in the all items index but it has concealed the extent of gouging in the sheltered sectors. And it has a regressively redistributive effect.
Just think of the effect of the increase in household welfare if the price gougers in the sheltered sectors had experienced only a fraction of the price falls that the gougers in the less sheltered sectors did.

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