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China’s Weak Growth Levels Must Signal a Cautionary Warning to All Parties Promising Election Giveaways

Jan 19, 2016

The news of China’s economic growth levels being at their lowest in 25 years for 2015 should come as a warning to all parties ahead of the General Election. The slowdown in the Chinese economy presents European countries and other developed economies with much uncertainty for the years ahead.

Commenting on the latest economic indicators, Mark O’Mahoney, Director of Policy with Chambers Ireland said, “While there are positive indicators for economic growth in Ireland for 2016, the next government needs to be wary of the global economic uncertainties and risks which threaten Irish economic recovery and stability. The weak Euro and low oil prices continue to support growth, however risks from within the Euro Area, the UK, the US and China remain, and should be factored into Ireland’s economic planning and budget.”

“As a small, open economy Ireland is highly vulnerable to exogenous shocks, and the economic policies being proposed by parties in the run up to General Election this year ought to be prudent. Big giveaways and tax cuts will set us up for future decline if international markets turn against us. The UK is Ireland’s single biggest trading partner; the current strength of the Sterling and the impact on the UK of a downturn in the Chinese economy will place a strain on the UK economy, and will in turn affect Ireland. Similarly, the US market is another which is considerably important, and trade with the US remains vital for Irish growth. Any downturn in the US economy would be strongly felt in Ireland.”

“The World Bank has recently forecasted only a modest increase in global economic growth and has identified an increase in risks to the global economy. The WTO recently lowered its growth forecast for global trade, while the IMF’s latest World Economic Outlook foresees lower global growth in comparison with last year. In light of this, and the external risks to which Ireland’s economic recovery is vulnerable, it is important that the next Government act in a way that is fiscally prudent and take into account the potential for a downturn in the economies of our trading partners and at a global level. Government spending and fiscal policies should be in line with this thinking in order to enable the sustainable growth of Irish industries and SMEs in the years ahead.”

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For further information contact Susan McDermott, Chambers Ireland on 01 400 4331, 086 6081605 or email susan.mcdermott@chambers.ie.

Chambers Ireland – Ireland’s largest business network creating the best environment for members locally, regionally and nationally.

 

 

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