Cowen welcomes 6% economic growth

Wednesday 28 March 2007 19.50
Brian Cowen - 6% growth in 2006
Brian Cowen - 6% growth in 2006

The Minister for Finance, Brian Cowen, has welcomed the latest official economic growth figures from the CSO which show the economy expanded at a rate of 6% last year.

Mr Cowen said the rate of expansion was greater than most commentators had expected.

However, he warned that despite the size, strength, and length of Ireland's economic success, it can not be taken for granted.

The Minister said that Ireland was part of an increasingly competitive global environment and needed to trade to prosper.

He said the country must build on its competitiveness by keeping taxes low, keeping costs in check, and by building a better public infrastructure.

Mr Cowen added that budget responsibility was the best guarantee of future sustainability.

The Minister for Finance also said that the Government's plans for the future were dependent on maintaining a strong economy.

He warned that without economic growth, the Government would not have the resources to reform taxes, or fund mprovements in public services.

Figures 'no comfort'

IBEC, the business representative body, has said that there is no comfort in today's figures.

The figures point to a slowdown in the housing sector which IBEC says intensifies the need to sell more of our goods and services abroad if living standards are to be maintained.

The organisation said the 2.9% decline in exports in the final quarter of the year was a dismal performance.

David Croughan, IBEC's chief economist said this is a measure of the loss of competitiveness that has resulted from unbalanced economic growth in recent years and that it cannot be sustained in the medium term.

6% growth

The CSO figures published today showed a growth rate, as measured by gross domestic product, of 6% for the year as a whole, boosted by a good performance by industry as well as strong growth in consumer spending.

Gross national product (GNP) growth was 7.4%, the best figure since 2000.

But the national accounts show a slowing of housing activity in the final quarter of last year.

The numbers also suggest that Irelands export boom is over, with the volume of goods exported down by 2.4% by the end of the year.

There were better fortunes, however, for the service sector with exports of services up 12.8% for the year as a whole.

Consumer spending grew by 6.2% in 2006, a slightly slower pace than in 2005.

Capital investment growth also slowed sharply to 3.9%, but industrial output growth accelerated from 3.4% to 6.1%.

For the fourth quarter of 2006, GNP grew at an annual rate of 7.5%, GDP by 5%.