The preliminary results of last April’s Population Census are available here.
They show continued strong population growth, averaging 1.6% a year over the last five years.
The CSO is to be complimented on the timely production of this very informative release.
One of the point that has been made repeatedly about the Irish economy over the past year or so is that weak domestic demand is connected with a high savings rate. (Admittedly, the actual national income data on personal savings rates are only available with a long lag but the slow pace of consumption spending is consistent with this story). Many, including now Minister Noonan, put this increase in the savings rate down to discretionary precautionary savings and believe that once people relax about their future, domestic demand will take off again.
I’ve always been pretty skeptical of this argument. My take on spending patterns has been that the increase in the savings rate may be more connected to people who had previously been able to live beyond their means having to pay back debt because of the change in financial market conditions, while others who have always saved continue to do so.
The implications of this story for the future evolution of the savings rate are quite different. There is little reason to think those who have been saving all along (e.g. for retirement) will reduce their propensity to do so. Indeed, if they were reliant on their funds invested in Irish property or in Irish pension funds now subject to the new levy, then the opposite would be the case. And those who are apparently saving because they are re-paying debt are, in practice, feeling as if every euro they earn is earmarked for either debt repayment or managing to keep going. These people are also unlikely to suddenly start spending if the economy stabilises.
Anyway, I’ve meant to make that point on this blog loads of times but didn’t. Then Seamus Coffey wrote this excellent post and, in comment speak, I want to say “What he said.”
The quarterly national accounts for 2011:Q1 have been released. They show seasonally adjusted real GDP increasing 1.3% quarter over quarter and seasonally adjusted real GNP falling 4.3% over the same period.
Smoothing through the volatile quarterly series, looked at on a year-over-year basis, real GDP was up 0.1 percent and real GNP was down 0.9 percent.
Overall, the picture seems to be one of an economy in which output has stabilised. Given the substantial negative headwinds (fiscal contraction, falling credit, debt overhang and a frozen property market) this is a pretty good performance. Still, it seems too early to say that the economy is about to produce a period of job-producing growth.
The OECD has launched a new index with the aim of facilitating comparisons of the quality of life across countries. You can find the country summaries here.
Ireland does quite well in the rankings, although the usual caveat about using GDP in an Irish context applies. Moreover, the data used are mostly from 2008 and we have undoubtedly slipped towards the relegation zone since then.
The new IMF Country Report is available here. A transcript of yesterday’s conference call following the release of the report is also available (see here). Dan O’Brien provides analysis here. Update: Additional analyses from Colm McCarthy (see here) and Cliff Taylor (article; SBP editorial).
It is encouraging that both the IMF and the European Commission are impressed with the government’s implementation of the programme. The unavoidable fact remains, however, that bond markets are unconvinced on Ireland’s long-term creditworthiness. Not too surprisingly, the IMF is more willing to be critical of Europe’s approach to resolving the crisis. It is becoming increasingly evident that uncertainty about the evolving balance between bailouts and bail-ins is making investors shun Irish bonds. The critical challenge is to convince investors to provide new funds to Ireland, which is now being hampered by fears of being caught up in any future bail-ins. It is also interesting that the European Commission is more open than the IMF to a modest speeding up of the fiscal adjustment. This could be viewed as a high-return investment in reinforcing the credibility of the government’s capacity to see through the necessary adjustments, which already differentiates Ireland from Greece and probably Portugal.