ireland 2015 more inclusive and productive dublin 15 september
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www.oecd.org/eco/surveys/economic-survey-ireland.htm
OECDOECD Economics
2015 OECD ECONOMIC SURVEY OF IRELAND
More inclusive and productive15 September 2015
2
How is life in Ireland?Generally good.
Source: OECD Better Life Index 2015
Income and wealth
Jobs and earnings
Housing
Work and life balance
Health status
Education and skillsSocial connections
Civic engagement and governance
Environmental quality
Personal security
Subjective well-being
0
5
10
Ireland OECD
3
Household income inequality is below the OECD average
Source: OECD Income Distribution Database
Ireland’s comprehensive welfare system protected vulnerable groups during the crisis and underpinned the social cohesion needed to make reforms possible
DNK
CZE
FIN
SVN ISL
SVK
BEL
NOR
SWE
DEU
CHE
NLD
AUT
LUX
HUN
POL
FRA
IRL
NZL
CAN
AUS
OECD ES
TPR
TGB
RKO
RJP
NIT
AES
PGR
CIS
RTU
RUS
AM
EX
0
5
10
15
20
25
30
0
5
10
15
20
25
30ratio ratio
Ratio of incomes of the top 10% vs. bottom 10%, 2012
Note: Incomes after tax and transfers
4
Impressive reforms in recent years
Source: OECD and Irish Statute Book
Reform Main Legislation Enacted New or empowered regulator Remaining steps to be taken
Fiscal December 2012 Yes …
Financial and Banking Oct 2010 and August 2013 Yes …
Personal Insolvency December 2013 Yes …
Competition July 2014 Yes …
Corporate Governance December 2014 No
Water March 2013 Yes Complete the roll-out of household water meters
Labour Market Activation No legislation. Pathways to Work Reforms start February 2012 Yes Full roll-out of contracting out of job-
search services
Further Education and Training October 2013 Yes Design and implement new
apprenticeships and vocational training.
Government Accountability & Transparency July 2013, July and October 2014 Yes
Health (Pharmaceuticals pricing) May 2013 Yes
5
Strong real GDP growth has returned
Source: OECD Economic Outlook 97 Database, projections revised as of 10 September 2015.
Y-o-Y % growth Billion EUR
-6
-4
-2
0
2
4
6
8
10
12
40
60
80
100
120
140
160
180
200
220GDP growth (lhs) Real GDP (rhs)
GDP Growth2014 5.2%2015 5%2016 4%
6
130 thousand new jobs since early-2012 have reduced unemployment
Source: Central Statistics Office
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16% %
Seasonally adjusted monthly unemployment rate
Monthly unemployment rate 9.5%, August 2015
7
The budget deficit is falling
Source: OECD, National Accounts and OECD Economic Outlook 97 Database, projections revised as of 10 September 2015
Bank recapitalisation
General government deficit
2008 2009 2010 2011 2012 2013 2014 2015 2016-35
-30
-25
-20
-15
-10
-5
0
-35
-30
-25
-20
-15
-10
-5
0
% of GDP % of GDP
8
Public debt should be reduced
Source: Economic Outlook Database No. 97; OECD Calculations
Note: All scenarios use the projections in the Economic Outlook Database No. 97 for the years 2015 and 2016, revised as of 10 September 2015.
General government gross debt, debt simulation analysis
0
20
40
60
80
100
120
140
0
20
40
60
80
100
120
140
GDP growth 1.8%; balanced budgetGDP growth 1.8%, fiscal balance -2.8% of GDPGDP growth 0%, balanced budget
% of GDP % of GDP
9
Household debts make Ireland more vulnerable to international shocks
Source: OECD, Financial Indicators Database.
Household debt, 2013 or latest available
HUNSVN
SVKPOL
CZE ITAEST
AUTDEU
FRABEL
GRCUSA FIN JP
NESP
OECDPRT
GBRKOR
CANSWE
AUSCHE
NOR IRLNLD
0
50
100
150
200
250
300
0
50
100
150
200
250
300% of disposable income % of disposable income
10
Non-performing loans are still high
Source: IMF Financial Soundness Indicators and Central Bank of Ireland
The legal system is slow to resolve non-performing loans
Note: The definition of non-performing loans is not entirely standardised across countries. Many, including Ireland, are loans overdue for more than 90 days.
Non-performing loans, 2014Q4 or latest available
CAN
SWE
KOR
AUS
NOR
JPN
USA
GBR
TUR
MEX NLD
AUT
BEL
DNK
FRA
POL
SVK
CZE
ESP
PRT
SVN
HUN
ITA
IRL
GRC
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35 % of total loans % of total loans
11
Property prices are rising again
Source: OECD, Economic Outlook Database
Take further supervisory measures as needed
Real housing prices
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201475
100
125
150
175
200
75
100
125
150
175
200Denmark Netherlands United Kingdom
Ireland
Index 2000=100 Index 2000=100
Making growth more inclusive
13
The tax and transfer system reduces inequality by more than any other country in the OECD
Note: 2012, for Canada 2011, GINI coefficient before and after taxes and transfers
Source: OECD Income Distribution Database
DNK
SVK
SVN
NOR
CZE
ISL
FIN
BEL
SWE
AUT
NLD
CHE
HUN
DEU
POL
LUX
IRL
FRA
KOR
OEC
D
CAN
AUS
ITA
NZL
ESP
EST
PRT
GRC
GBR
ISR
USA
TUR
MEX
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7Gini before taxes and transfers Gini after taxes and transfers
14
Ireland’s relative poverty rate remains low
Source: OECD Income Distribution database.
Poverty rate after tax and transfers, 2012
Note: Percentage of the population with income below 60% of the median, latest comparable information
CZE
ISL
DNK
SVK
FIN
NLD
NOR
DEU
FRA
AUT
IRL
SVN
CHE
LUX
HUN
POL
SWE
GBR
OECD BE
LCA
NIT
ANZ
LPR
TKO
RES
TAU
SES
PGR
CJP
NUS
ACH
LIS
RM
EXTU
R
0
5
10
15
20
25
30
0
5
10
15
20
25
30% of total population % of total population
15
The gender wage gap is low
Source: OECD Employment and Labour Market Statistics
NZL
BEL
LUX
GRC
NOR
DNK
ESP
HUN
POL
ITA
SVN
IRL
FRA
ISL
SVK
SWE
MEX
OECD CZ
ECH
LPR
TDE
UGB
RUS
AAU
SAU
TCH
EFI
NCA
NTU
RNL
DIS
RJP
NES
T
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
40% of male median wage % of male median wage
Note: 2013 or latest available. The gender wage gap is unadjusted and is defined as the difference between median earnings of men and women relative to median earnings of men. Data refer to full-time employees.
16
60% of jobseekers have been unemployed more than 12 months, with the risk of scarring effects
Source: OECD calculations based on quarterly national labour force surveys
Note: Countries are shown in ascending order of the share of long-term unemployment in total unemployment in Q4 2014.a) Data are not seasonally adjusted but smoothed using three-quarter moving averages. OECD
is the weighted average of 33 OECD countries excluding Chile.
b) 2013 for Israel.
%
Long term unemployment, % of total unemployed
KOR
MEX NZ
LIS
R ISL
CAN
TUR
SWE
AUS
USA
DNK
FIN
LUX
AUT
NOR
GBR G7
OEC
DCH
EJP
NPO
LFR
ANL
DES
TDE
UHU
NCZ
EEu
rope
an U
nion
BEL
Euro
are
aES
PSV
NIR
LPR
TIT
ASV
KGR
C
0
10
20
30
40
50
60
70
80
0
10
20
30
40
50
60
70
80
% %
17
Many low income families with children face strong disincentives to work
Source: OECD Taxing Wages (database).
Marginal effective tax rate 67% of the average wage, single, two children, percent (2014)
Reduce housing and welfare assistance payments more gradually as in-work income increases, so as not to discourage work
CHL
KOR
MEX IS
RCH
EPO
LJP
NSV
NDN
KNZ
LES
TNO
RTU
ROE
CDSW
ESV
KCZ
EGR
CHU
NLU
XUS
ANL
DPR
TIS
LES
PDE
UFI
NIT
AAU
TFR
AAU
SCA
NBE
LIR
LGB
R
0
10
20
30
40
50
60
70
80
0
10
20
30
40
50
60
70
80
% %
18
Childcare is expensive
Source: OECD, Tax-Benefit Models; www.oecd.org/els/social/workincentives.
Improve access and affordability of quality childcare, particularly for low income families
1. EU and OECD averages exclude Chile, Italy, Mexico and Turkey.
Lone parent, net cost, as percentage of average wage, 2012
KOR
LUX
SWE
DEU
AUT
ISL
GBR
POL
ESP
NLD
OECD
¹
SVN
JPN
ISR
CAN
USA
0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45% of average wage % of average wage
Getting the most out of migration
20
Migration is turning around
Source: CSO up to 2014. Projections for 2015 and 2016, based on equations described in the OECD Economic Survey of Ireland 2015 and unemployment rates as projected in OECD Economic Outlook.
• Promote greater participation from immigrants in employer provided training
• Provide English language support to students with foreign language backgrounds
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-60
-40
-20
0
20
40
60
80
100
120
-60
-40
-20
0
20
40
60
80
100
120Immigrants minus emigrants
Thousand persons Thousand persons
21
“Brains exchange”More than half of migrants are tertiary qualified
Source: Central Statistics Office (CSO)
Encourage and facilitate SMEs using trust-based work permit schemes so they can access foreign talent
Education attainment, 2014
Emigrants Immigrants0
10
20
30
40
50
60
70
80
0
10
20
30
40
50
60
70
80
Tertiary Secondary
Thousand persons Thousand persons
Raising productivity
23
Productivity growth has slowed
Source: OECD Economic Outlook database.
• Intensify competition in legal, port and electricity services
• Expand the National Competitiveness Council into a Productivity Commission
Total factor productivity growth
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-1
-0.5
0
0.5
1
1.5
2
2.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5Ireland United-Kingdom Netherlands United-States
% %
24
Government support for R&D is modest
Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013.
• Steadily expand research student placements in firms • Ensure Enterprise Ireland’s Technology centres are
demand driven • Focus Technology centres on improving product quality
and production processes
CHL
MEX
HUN
POL
GRC
SVK
AUS
IRL
NZL
ISR
SVN
CAN
ITA
GBR
ESP
LUX
BEL
OECD CZ
E
FRA
NLD
JPN
NOR
AUT
CHE
EST
SWE
USA
DEU
PRT
DNK
ISL
KOR
FIN
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1.1% of GDP% of GDP
25
Government innovation support to business is skewed towards R&D Tax credits
Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013.
Rebalance innovation supports towards direct grants
Government support for business innovation
MEX CH
L
POL
CHE
SVK
LUX
ITA
TUR
NZL
FIN
DEU
JPN
DNK
EST
PRT
SWE
AUS
NOR
OECD ES
P
GBR
NLD
IRL
HUN
CZE
AUT
CAN
BEL
USA
SVN
FRA
KOR
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40R&D grants R&D tax incentives
% of GDP% of GDP
More Information…
www.oecd.org/eco/surveys/economic-survey-ireland.htm
OECDOECD Economics
Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
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