The Irish Department of Finance has published its Annual Review and Outlook dealing with the outturn for the economy in 2004 and the prospects for 2005, which, according to the government, indicates that the economy remains on a strong footing and is well set to face future challenges.

“These figures confirm that our economic fundamentals remain strong," announced Minister for Transport, Martin Cullen, who spoke on behalf of the Government upon the release of the review last week.

Mr Cullen continued:
" Once again, Ireland continues to enjoy low unemployment, high rates of job creation, rising incomes, budgetary stability, low inflation and buoyant economic growth. These welcome features have been the hallmarks of our economy since 1997 and are secured by the policies and management of this Government."

“ While there are challenges, the economic outlook remains very positive. Historically high oil prices and their international impact are being felt across the globe, including here at home. We can best deal with them by maintaining our competitiveness. That means that we must keep our price and wage inflation in line with our international peers and reinforces the need to continue with balanced and responsible polices in Government. The Government will continue, working with the social partners, to pursue sound policies to secure the future."

Throughout 2004 the Irish economy continued to record solid growth, in line with the international economy. National accounts data for 2004 show that GNP grew by 4 per cent last year, while GDP growth was 4.5 per cent. Employment growth was particularly robust at 3 per cent or over 54,000 new jobs, the highest number of jobs created since 2001. Consequently unemployment remained low by international standards and fell to 4.4 per cent.

GNP is forecast to grow by 5 per cent in 2005 and GDP by 5.1 per cent; this is very strong by European standards.

Inflation continued to be moderate in 2004. The Consumer Price Index fell to 2.2 per cent from 3.5 per cent in 2003. In 2005, inflation is forecast to average 2.4 per cent in CPI terms.
As a small and very open economy, Ireland is highly integrated into the global economy through both trade and investment links. As such its economic conditions are significantly influenced by the global economic environment. The global economy continues to expand, albeit at a slower pace than in 2004. However, oil prices are at very high levels and this could result in slower international growth if sustained.

Commenting on the outlook, the Minister for Finance Brian Cowen welcomed the continued positive growth outlook.

“ We have a strong record of job creation and real wage growth. To maintain this performance we must stay competitive and manage our unit labour costs accordingly. This is in all our interests,” he stated.