Good economic news thread

Quin_Dub

nice_guy80 wrote: »

Won't FG look like right geniuses when Greece gets a large debt write down and very favourable loans from the Troika to help them over the next 3 years, until the next crisis.

Setting aside any arguments to be had over Debt write-downs etc. And there are many valid ones to be had.

How can anyone think that any deal that Syriza may or may not get is any kind of victory???

Or indeed try to suggest that the approach taken in Ireland is in someway deficient in light of the Syriza situation..

Bottom line , Syriza have , in less than 6 months, ruined Greece more quickly and more completely than the last 5 years of "Troika Austerity"

And for what?? - Even further , deeper Austerity with a "possibility" of a debt restructure - aka the Deal Ireland got in 2011/2012

It truly mystifies me...

fxotoole

Irish rail report a half million increase in passenger numbers, and in particular an increase in the number of Taxsaver tickets being purchased. This implies an increase in the amount of people going back to work:


http://www.thejournal.ie/irish-rail-passengers-numbers-increase-2225496-Jul2015/

golfwallah

Yes, some domestic economic indicators are up but we are still living on borrowings. Therefore, we are highly exposed to any unforeseen events that might just pop up (like Lehman Brothers, for example). Better for the majority to reduce the debt risk than start pumping up state spending on sectional interests, such as public service pay rises, I would think, but then I'm not a politician worried about re-election.

The longer our massive debt level continues, the more we are exposed to the consequences of external risks such as China's stock market, falling commodity prices (as impacting on Australia), economic slowdown in the bigger EU states such as Italy and Spain, possibility of Brexit, etc. And that's all without considering political instability caused by ISIS and civil wars in Eastern Europe and the Middle East.

No, our politicians seem more focussed on doing just about enough to satisfy EU borrowing targets.

Have we learned nothing from our own and Greece's recent experience of what can go wrong when you are borrowed to the hilt? One thing for sure, whatever about "EU solidarity", if it all goes pear shaped, we are on our own!

Godge

golfwallah wrote: »

Yes, some domestic economic indicators are up but we are still living on borrowings. Therefore, we are highly exposed to any unforeseen events that might just pop up (like Lehman Brothers, for example). Better for the majority to reduce the debt risk than start pumping up state spending on sectional interests, such as public service pay rises, I would think, but then I'm not a politician worried about re-election.

The longer our massive debt level continues, the more we are exposed to the consequences of external risks such as China's stock market, falling commodity prices (as impacting on Australia), economic slowdown in the bigger EU states such as Italy and Spain, possibility of Brexit, etc. And that's all without considering political instability caused by ISIS and civil wars in Eastern Europe and the Middle East.

No, our politicians seem more focussed on doing just about enough to satisfy EU borrowing targets.

Have we learned nothing from our own and Greece's recent experience of what can go wrong when you are borrowed to the hilt? One thing for sure, whatever about "EU solidarity", if it all goes pear shaped, we are on our own!

Not all economic changes have the same effect.

Falling commodity prices will benefit Ireland by reducing the cost of imports. Similarly, Brexit may be positive as financial firms trading in London may opt for the IFSC instead. Political instability in Israel may convince many technology firms to opt for Ireland rather than Israel. You need to analyse the changes a lot better rather than just saying something will be bad for Ireland.

golfwallah

Godge wrote: »

Not all economic changes have the same effect.

Falling commodity prices will benefit Ireland by reducing the cost of imports. Similarly, Brexit may be positive as financial firms trading in London may opt for the IFSC instead. Political instability in Israel may convince many technology firms to opt for Ireland rather than Israel. You need to analyse the changes a lot better rather than just saying something will be bad for Ireland.

I think most economic commentators would look at falling commodity prices much more broadly as an indicator of reduced world trade and a consequence of a slow down in general economic activity - as opposed to the immediate short-term effect on Ireland. Likewise, very few economic commentators would see Brexit as an overall positive for Ireland.

All these indicators are warnings as to the risks of holding onto enormous debt as a percentage of GDP. That risk is of increases in interest rates at a time when world trade and our share thereof is facing decline. A high risk of a fall in Irish GDP, coupled with higher government spending and interest payments could put us right back in the firing line we were in just a few years ago.

It follows that Government priorities should be focussed on reducing the debt and risk to the country at large rather on the narrower objective of getting re-elected by appeasing well organised sectional interests (e.g. public service pay rises).

andrew

golfwallah wrote: »

I think most economic commentators would look at falling commodity prices much more broadly as an indicator of reduced world trade and a consequence of a slow down in general economic activity - as opposed to the immediate short-term effect on Ireland. Likewise, very few economic commentators would see Brexit as an overall positive for Ireland.

All these indicators are warnings as to the risks of holding onto enormous debt as a percentage of GDP. That risk is of increases in interest rates at a time when world trade and our share thereof is facing decline. A high risk of a fall in Irish GDP, coupled with higher government spending and interest payments could put us right back in the firing line we were in just a few years ago.

It follows that Government priorities should be focussed on reducing the debt and risk to the country at large rather on the narrower objective of getting re-elected by appeasing well organised sectional interests (e.g. public service pay rises).

To the extent that debt is a problem, I don't think it's because interest rates might rise. For as long as the economy is slow, the ECB will keep interest rates low.

More generally, here's an article from someone in UCD called 'What really explains the irish economic recovery?.' the author argues that the Irish recovery has nothing to do with the Troika-led adjustment of austerity and everything to do with the path dependent effect of a state-led developmental strategy.

glacial_pace71

golfwallah wrote: »

I think most economic commentators would look at falling commodity prices much more broadly as an indicator of reduced world trade and a consequence of a slow down in general economic activity - as opposed to the immediate short-term effect on Ireland. Likewise, very few economic commentators would see Brexit as an overall positive for Ireland.

All these indicators are warnings as to the risks of holding onto enormous debt as a percentage of GDP. That risk is of increases in interest rates at a time when world trade and our share thereof is facing decline. A high risk of a fall in Irish GDP, coupled with higher government spending and interest payments could put us right back in the firing line we were in just a few years ago.

It follows that Government priorities should be focussed on reducing the debt and risk to the country at large rather on the narrower objective of getting re-elected by appeasing well organised sectional interests (e.g. public service pay rises).

I think a little balance is needed when considering the "well organised sectional interests". This week at the economic and social forum IBEC basically regurgitated verbatim a Construction Industry Federation script for more expenditure on its members. Bear in mind that 'capital' expenditure can often be a form of corporate welfare, particularly if supposed "infrastructural investment" decisions are based on electoral auction politics of building unnecessary by-passes in political marginal constituencies rather than something necessary but potentially disruptive for commuters (e.g. airport light rail link, whether or not a form of LUAS rather than metro).

Btw have a read of the June 2015 review of the financial emergency legislation (FEMPI). The public sector pay bill remains about €3 billion less than in 2009, i.e. the planned €200 million per annum of reverses to pay cuts and levies would take over a decade for many to see their salaries return to their 2009 levels. (The actual overall pay budget wouldn't reach that 2009 figure, as the numbers are smaller and the demographic profile will see new entrants on the bottom of the pay scales replace those retiring).

http://www.per.gov.ie/reports/

More interesting is the decision to begin the process of unwinding the financial emergency provisions (FEMPI s.4) relating to the contractual arrangements for pharmacists, dentists and so forth. They suffered unilateral repudiation of their contracts by the Government. Although nowhere near the losses experienced by public servants, these contractors lost heavily, particularly when the payment can represent an element turnover rather than income per se, as they often have fixed costs already incurred and contractual arrangements with other parties that they can't simply rip up. To add to their woes, they also lost a legal challenge to FEMPI, but they're waiting in the wings: it would not be 'good economic news' if they were to mount a fresh legal challenge based upon the current facts and figures. If FEMPI falls then there could be a €3+ billion bill. As it stands, €200-€300 million per annum wouldn't even match the amount of current expenditure being ramped up on minor political pet projects. (Don't forget that the falling social welfare bill is already being 'earmarked' by many Govt Ministers, despite the cuts to lone parent allowance etc that they're continuing to implement).

Poor decisions on current and capital expenditure remain a problem but don't confuse this problem of poor governance and political incompetence with a token partial reversal of 7-8 years of cuts for some public servants. Btw watch for the property tax changes: already FG have decided on rewarding unearned income from capital appreciation, hardly the best way to encourage productive investment in the economy. (Didn't John Teeling once say - after one of his mining/exploration companies went belly-up just as his distillery began to thrive - that he would have been better off just buying some bricks-and-mortar semi-ds in Clontarf?)

The budget may contain plenty of giveaways but not necessarily good economic news.

draiochtanois

This post has been deleted.

serfboard

From RTÉ:

RT&#201 wrote:

The overall level of GDP and GNP has now overtaken the previous peak in 2007.

Our "lost decade" lasted 8 years.

Of course we're not back to the 2007 employment level but we may not get back to that level becuase 20+% of the 2007 GDP/GNP figures were from the labour-intensive construction industry.

Still good news though.

Quin_Dub

serfboard wrote: »

From RTÉ:

Our "lost decade" lasted 8 years.

Of course we're not back to the 2007 employment level but we may not get back to that level becuase 20+% of the 2007 GDP/GNP figures were from the labour-intensive construction industry.

Still good news though.

And this is the challenge that we'll continue to have.. Those labour intensive activities are not sustainable long term.

This is also why we still hear the feedback of "The recovery isn't being felt everywhere" - It isn't and it won't, certainly not if you are a low skilled construction( or related) industry (former)employee.

Those jobs are never coming back - What's needed is a solid plan for up-skilling/re-skilling those people so that they can find employment.

Not easy , but the only sustainable solution.

serfboard

Quin_Dub wrote: »

Those jobs are never coming back - What's needed is a solid plan for up-skilling/re-skilling those people so that they can find employment.

The sadly ironic thing about the boom was that in now turns out we actually didn't build enough housing ... in Dublin (and to a far lesser extent in the other cities). You only have to look at the crazy rent prices to see the effect of the Dublin housing shortage. Our construction rate is now too low for the number of houses needed, so a number (not all obviously) of those currently idle construction workers could in fact be working if our banks weren't so busted.

The rest will, as you say, either have to re-skill, emigrate or face life on the dole.

Quin_Dub

serfboard wrote: »

The sadly ironic thing about the boom was that in now turns out we actually didn't build enough housing ... in Dublin (and to a far lesser extent in the other cities). You only have to look at the crazy rent prices to see the effect of the Dublin housing shortage. Our construction rate is now too low for the number of houses needed, so a number (not all obviously) of those currently idle construction workers could in fact be working if our banks weren't so busted.

The rest will, as you say, either have to re-skill, emigrate or face life on the dole.

Agreed - We do need to be building a bit more in specific places , but we should never aspire to getting back to the same level of construction employment that we had in the early 2000's.

We also need to be building the right kind of properties - Recent reports about them wanting to relax the planning laws in Dublin to allow the building of more "studio" apartments with less windows (aka shoeboxes) is entirely the wrong approach in my view..

We need to be building Family sized apartments in the cities with the appropriate resources (shops,schools , playgrounds, grass ares etc) not more 1 bed apartments that people will only live in for a few years before they move to the 'burbs....leading to more urban sprawl , more traffic etc. etc.

amandstu

draiochtanois wrote: »

This post has been deleted.

I am also wondering why it is that the Irish economy does so well.

When I saw that 6.5% figure I was amazed, but then I was amazed before when the economy here was continuously growing at such high rates over quite along period (the Charlie McCreevy period).

I am not sure if it needs to operate like a roller coaster, though.

The crash was international first and foremost and Ireland was very exposed as well as contributing to its own "mini" crash.

I am very surprised at this recovery coming on so quick and I too wonder what are the reasons behind it. If it continues this way I guess the economists around the world will be asking themselves the same question.

serfboard

Quin_Dub wrote: »

We also need to be building the right kind of properties - Recent reports about them wanting to relax the planning laws in Dublin to allow the building of more "studio" apartments with less windows (aka shoeboxes) is entirely the wrong approach in my view..

We need to be building Family sized apartments in the cities with the appropriate resources (shops,schools , playgrounds, grass ares etc) not more 1 bed apartments that people will only live in for a few years before they move to the 'burbs....leading to more urban sprawl , more traffic etc. etc.

Will you go away outta that, with your far-too-sensible proposals. This is Ireland after all, where gobhites like Tom Parlon have the ear of government :mad:

amandstu wrote: »

I am also wondering why it is that the Irish economy does so well.

When I saw that 6.5% figure I was amazed, but then I was amazed before when the economy here was continuously growing at such high rates over quite along period (the Charlie McCreevy period).

I am not sure if it needs to operate like a roller coaster, though.

The crash was international first and foremost and Ireland was very exposed as well as contributing to its own "mini" crash.

I am very surprised at this recovery coming on so quick and I too wonder what are the reasons behind it. If it continues this way I guess the economists around the world will be asking themselves the same question.

I'm wondering if this is because of our much-touted "open" economy, which would make us more susceptible to upturns and downturns?

Also, the super-low euro, whose purpose is to benefit the Germans, also happens to work in our favour wrt our trade with the UK.

Saipanne

amandstu wrote: »

I am also wondering why it is that the Irish economy does so well.

When I saw that 6.5% figure I was amazed, but then I was amazed before when the economy here was continuously growing at such high rates over quite along period (the Charlie McCreevy period).

I am not sure if it needs to operate like a roller coaster, though.

The crash was international first and foremost and Ireland was very exposed as well as contributing to its own "mini" crash.

I am very surprised at this recovery coming on so quick and I too wonder what are the reasons behind it. If it continues this way I guess the economists around the world will be asking themselves the same question.

Historically speaking, small open economies bounce back much faster than large economies.

Sand

Saipanne wrote: »

Historically speaking, small open economies bounce back much faster than large economies.

They also get much softer landings than large economies.

Greyian

New Car Sales at Highest Level Since 2008

Definitely seems that a lot of people feel they have more disposable income.

draiochtanois

This post has been deleted.

Saipanne

draiochtanois wrote: »

Au contraire "More than 73% of cars sold in the month fell into the ‘A’ tax band"
I think it's more likely the draconian tax rates on pre 2008 cars is having an effect.

*slow clap*

Greyian

draiochtanois wrote: »

This post has been deleted.

You should provide a source for that, because it doesn't seem to be mentioned in the Irish Times article.

More relevantly though, do you really think a huge number of people somehow have too little disposable income to pay their current car tax, yet also have enough to afford new cars?

Edit: According to the article, the most registered car was the VW Golf. The entry level Golf retails at €21,000. All Golf models have A4 (or lower) motor tax classifications. Are you suggesting that the reason people are buying 2015 cars are because they don't have money?

Quin_Dub

Greyian wrote: »

You should provide a source for that, because it doesn't seem to be mentioned in the Irish Times article.

More relevantly though, do you really think a huge number of people somehow have too little disposable income to pay their current car tax, yet also have enough to afford new cars?

Indeed..Far more likely is.. "Hey I finally have a few quid available , I can get a new car and while I'm at it reduce my running costs..."

draiochtanois

This post has been deleted.

K-9

Saipanne wrote: »

*slow clap*

Mod:

Either respond properly or don't bother at all, thank you.

serfboard

draiochtanois wrote: »

This post has been deleted.

You think a 15 grand+ capital outlay is going to cover all that?

I think not.

There's a reason people like the ESRI measure consumer sentiment. With the level of car buying they don't need to - it's right there in the 100K plus figures.

OTOH, for a bit of balance, I'd like to know how many of the cars were bought using finance arrangements. SIMI don't tell us that because they don't care, but if the media were doing anything more than copying-and-pasting press releases they'd have investigated it.

draiochtanois

This post has been deleted.

Godge

More good news!

http://www.rte.ie/news/business/2015/0805/719372-tax-receipts-remain-ahead-of-target/



http://www.finance.gov.ie/sites/default/files/Exchequer%20Returns%20end%20July%202015%20information%20note_0.pdf

"Total Exchequer debt servicing costs at end-July 2015 were €4,395 million. On a like-for-like basis –
that is excluding the sinking fund contribution from 2014 – this represents a year-on-year decrease of
€126 million or 2.8%, largely reflecting the impact of the early loan repayments to the IMF. Interest
expenditure at end-July 2015, at €4,322 million was €261 million 5.7% below profile. This is primarily
due to lower than expected costs on the bond issuance completed so far this year as well as the faster
pace of early repayment of the full portion of IMF loans which were subject to the higher rate of charge"


Full credit to the Minister, Michael Noonan and the NTMA for achieving a €252m equivalent annual reduction in the interest rate.

johnnyskeleton

Mod note:

Hi folks,

Just a heads up, we might start moving the busy threads such as this one from Irish Economy to the Main Forum shortly.

If you wamt to post feedback before we decide to do so, you can post it here:

http://www.boards.ie/vbulletin/showthread.php?t=2057470732

Otherwise, if you post in this subforum only to find it in te main forum, please do not be alarmed!

FreudianSlippers

johnnyskeleton wrote: »

Mod note:

Hi folks,

Just a heads up, we might start moving the busy threads such as this one from Irish Economy to the Main Forum shortly.

If you wamt to post feedback before we decide to do so, you can post it here:

http://www.boards.ie/vbulletin/showthread.php?t=2057470732

Otherwise, if you post in this subforum only to find it in te main forum, please do not be alarmed!

I don't believe subscriptions are impacted by such a move?

draiochtanois

This post has been deleted.

FreudianSlippers

draiochtanois wrote: »

This post has been deleted.

It'll be going into Politics (General) rather than the Cafe I believe, so shouldn't be a problem with trolling etc.