The European Commission published today its annual review of how countries complied with the European Union's broad economic policy guidelines in 2000.
Here is a summary of the information on Ireland.
- Irish gross domestic product grew around 10.5 percent in 2000, due to strong domestic demand and booming exports.
- Rising output gap has brought inflationary pressures which inappropriate 2001 government budget adds to.
- In coming years, economic growth will have to slow to a more sustainable pace. As the influence of special factors unwinds, the inflation outlook is for a gentle decline, but, given the extent of the overheating, the risks are on the upside.
- Current ECB monetary policy stance too easy for Ireland, degree of fiscal tightening is clearly desirable .
- There is significant risk that wage deals in 2001 will come in above 7.5 percent target agreed last December. Growth in immigration, needed to help ease labour market pressures, may be held back by lack of affordable housing.
- There is strong case for deferring less urgent public investment projects, to help alleviate capacity constraints in construction sector.
- Product markets generally competitive, but competition weak in retail, pharmaceutical sectors.
- Technology's share in total output the highest in the EU thanks to large presence of foreign firms. Government R&D spending among lowest in EU, although set to rise in 2000-06.
The Commission said the full text of its report will be made available at: http://www.europa.eu.int/comm/economy-finance/document/docum-en.htm