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OECD warns Ireland that investment projects need to be ‘carefully sequenced’

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Organisation-For-Economic-Co-Operation-And-Develop News

Irish-Fiscal-Advisory-Council

While large investments in housing, transport and energy are needed, the Irish economy faces capacity constraints, especially in terms of labour and skills

OECD headquarters in Paris: the agency's latest World Economic Outlook points to a rebound of growth in the Irish economy next year. Photograph: AFP/Getty Images

“Effective prioritisation and sequencing of projects are needed to balance potential short-run inflationary impacts and the long-run benefits of enhanced public investment,” it said. Following a contraction this year, it predicted the Irish economy would rebound growing by 3.7 per cent and 3.5 per cent in 2025 and 2026 respectively “as volatility from the multinational sector subsides, financial conditions improve and goods exports recover”.

It warned, however, that repeated breaches of the State’s 5 per cent spending rule “risked lowering” the Government’s fiscal credibility. “Sustained adherence to the 5 per cent spending rule is needed to ensure the long-term sustainability of public finances,” it said.

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