The Deputy Governor of the Central Bank has cautioned that the outlook for the economy is complicated by the outcome of the Brexit referendum in the UK.
Addressing the Global Interdependence Center Central Banking Series in Dublin, Sharon Donnery said it is clear, however, that the impact will be negative and material, both in the short-term and in the longer term.
"The long-run economic impact of Brexit on Ireland will be influenced by the nature of the withdrawal agreement between the EU and the UK and the subsequent evolution of both economies", she added.
Ms Donnery told the conference that the Irish economy is performing well, which she said was confirmed by a wide range of indicators, including labour market data as well as consumer and underlying investment spending data.
She also addressed the challenges presented by economic statistical data from the Central Statistics Office, adding that in the case of Irish macroeconomic and financial headline statistics are becoming more and more complicated.
She said that in order to get a more accurate measure of the level of activity in the domestic economy it is necessary to look beyond the headline GDP and GNP figures to other more reliable spending and activity indicators.
"These suggest that, while not growing at a rate of 26%, economic activity continues to expand at a reasonably healthy pace," she added.
The Deputy Governor said the availability of good statistics is "paramount" from the Central Bank's perspective, as the bank is not only intensive users, but also significant producers.
"It is imperative that we explore ways of overcoming these challenges. In this context, a consultative group has been established by the Central Statistics Office to develop supplementary statistical information that will generate more comprehensive insight to the dynamics of the Irish financial and economic system," she stated.
Ms Donnery also noted that financing conditions have eased across the Irish economy as a result of the monetary policy stimulus measures from the European Central Bank.
On the banking sector and despite some improvements, she noted that lending rates continue to be higher in Ireland, with mortgage rates and SME interest rates comparatively higher.
Non-performing loans continue to contribute to banks' balance sheet fragility and impinge on profitability and strain capital buffers. This in turn impedes bank lending, she stated.
"Therefore, the continued deliberate and determined work-out of non-performing loans coupled with ongoing improvements in the Irish economy, will reduce the burden they pose and support the extension of new loans to the real economy," Ms Donnery stated.
Today's conference in Dublin also heard from Philadelphia Fed President Patrick Harker.
Mr Harker said that the US Federal Reserve is moving "slowly but surely" towards its 2% inflation target and a continued normalisation of monetary policy could boost lagging business investment.
"If you look at the statistics in the US, save inflation and I think we're moving slowly but surely towards our 2% target, the one area that has lagged is business investment," Mr Harker said.
"A continued normalisation of our monetary policy would be a good thing in terms of possibly bringing back some business investment," he added.
