Why the Irish economy is shrinking and what to do about it

The Irish economy shrank by 1.5 per cent in the year to March 2018 compared with the same period last year, according to data from the Central Statistics Office.

The latest quarterly report shows that the Irish population fell by 1 per cent and the number of people on the benefit of the Earned Income Tax Credit fell by 13,000 in the 12 months to March.

This was the second consecutive quarterly drop in the number on the tax credit, and follows a 3 per cent decline in April 2018. 

The Government has committed to spending $2.5 billion on the programme over the next four years, but that is not enough to reverse the economic downturn.

The number of unemployed is at its highest level since 2007, with the latest figures showing that there were 9,500 people without a job in April.

The economy is expected to contract by 0.6 per cent this year, the biggest contraction since the global financial crisis. 

It’s estimated that the government’s proposed cuts to the Earn-Based Workfare scheme will reduce employment by up to 5.4 million people, while the proposed increase in the Work Capability Assessment will cut employment by 2.1 million people.

The Government’s Budget will include a commitment to the Irish Government to support the creation of jobs in the Irish private sector.

Last year, President Michael D Higgins announced plans to cut public spending by 3 per to 5 per cent of GDP over the coming decade.

 “The Irish Government has not only committed itself to the programme but has also taken the decision to provide financial assistance to the unemployed in Ireland,” Mr Higgins said at the time.

The government has pledged to invest up to $500 million in public services over the course of the next three years, with more money to be provided by 2019-20.”

In addition, the Irish government has also committed to provide support to the working poor through the Irish Work for the Dole programme and the Irish Assistance to the World Fund.”

The government has pledged to invest up to $500 million in public services over the course of the next three years, with more money to be provided by 2019-20.