Transcript Ireland
Ireland Six Years After Crisis, Emerald Isle Is Wearing the Green – But Not Rolling In It Ireland’s Better – Not Great Growing Faster than U.S. – GDP Rose 4.8% in 2014 v. 2.4% in U.S. Unemployment is Still 10.1% -- U.S. is 5.5% Both Economies Hiccupped in 4th Quarter Sources: CIA Factbook, Eurostat, Bureau of Labor Statistics, Irish Central Statistics Office. Ireland’s Recovery Is Different than in the U.S. Investment is Growing Faster There +11.3% in 2014 – Ireland +5.9% in the U.S. But Irish Consumers Aren’t Spending Much In late 2014, U.S. consumption rose 4%/year In Ireland, consumption grew just 1.3% Data: Irish Central Statistics Office, U.S. Bureau of Economic Analysis Beer, Housing, Wages – All Depressed As in U.S., Wage Growth is Slow but Low Inflation Helps Inflation. -0.1% in U.S., -0.6% Ireland (Year Ending Jan. 2015) Wages: 1.7% U.S., 1.7% Ireland (Year Ending December) Home Prices Fell By Half, Versus About One-Third in the U.S. And rose 8% last year What is there to life? Irish Beer prices still down 10% from 2009 But Beer’s Up 9.6% Since 2012 Sources: Federal Reserve, Bureau of Labor Statistics, CSO Ireland’s Biggest Exports – Not What You think Exports, Like Investment, Lead Ireland’s Recovery It’s Not Guinness – Which is Made All Over the World About a third of exports are pharmaceuticals or other medical goods. About 14% is food and drink Google, Microsoft and Johnson & Johnson are top exporters from Ireland Sources: Irish Exporters Assoc., MIT, Eurostat, CSO, WSJ Easing Off Austerity Ireland is Big Gainer from European Central Bank easing, which helps exports Irish 10-year bond yield 0.82% No new spending cuts needed to meet deficit targets, local experts say Irish Budget Deficit is Smaller but National Debt is Much Larger than in U.S U.S. Debt = 72.5% of GDP Ireland Debt= 118% of GDP Ireland could be vulnerable if Greece falters and creditors get wary Sources: Economic and Social Research Institute (Dublin), Moody’s Analytics, IHS Global Insight, Investing.com Bottom Line: Better, but Could Still Use a Drink Unemployment Forecast to Stay Near 10% Through 2016. 10.5% 2015, 9.9% 2016 Growth expected to be faster than U.S. for next two years 2015: 3.3% Ireland, 3.1%US 2016: 3.2% Ireland, 3.0% US Quote: “Things are looking up, but in the near term the growth rate is misleading. …The weakness of the euro should really help.” – Diego Iscaro, IHS Global Insight Data:, Origanisation for EConomic Cooperation and Development