Quarterly Bulletin No.3 2021

Read the full Comment for Quarterly Bulletin No.3 2021

Léigh tráchtaireacht ar an Timpeallacht Gheilleagrach.

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With the relaxation of COVID-19 restrictions, domestic economic activity is rebounding. While the possibility of a more protracted recovery cannot be fully discounted, the near-to-medium term prospects for the economy are more favourable than at the time of the last Bulletin. The progress of the vaccination programme, more positive consumer and business sentiment and supportive fiscal and monetary policy all bolster the outlook. Alongside a more positive external environment, this leads to expectations of relatively robust growth in headline measures of activity such as GDP, domestic demand and employment through to 2023. 

Read this chapter in full: The Irish Economy.

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This article provides a detailed overview of the new statistical dataset on occupational pension funds collected by the Central Bank of Ireland. It highlights the growing importance of the sector with new insights on the structure of assets, liabilities, and changes in pension fund membership.

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The global economy is expected to recover strongly, although differences across countries in the pace of vaccination will likely lead to varying speeds of recovery. The EU, US and UK economies are set for a strong expansion, while monetary policy remains supportive.

Read in full: International Outlook

This Box provides an update on the development of Irish households’ and firms’ spending, savings and borrowing activities at an aggregate level.

Read in full: Spending, credit, and deposits: An update on Irish households and business activity

On 27 February 2021, the US House of Representatives passed President Biden’s America Rescue Plan. The associated fiscal package is very large, amounting to $1.9 trillion (8.5 per cent of 2020 GDP). This Box provides an assessment of the possible economic implications of the Biden package for the US economy as well as spillovers to the rest of the world and Ireland.

Read in full: Spillovers to Ireland from the America Rescue Plan

The lack of opportunities to spend, combined with the fiscal interventions to protect incomes during the pandemic led to a significant accumulation of savings by Irish households. While the baseline projection assumes a gradual normalisation of the savings ratio, this Box explores two alternative scenarios for the evolution of Irish households’ savings from these high levels and the implications of each scenario on consumption and the economic outlook.

Read in full: The unwinding of savings accumulated during the pandemic

The impact of public health restrictions and pandemic-related policy supports on the labour market has seen varying degrees of income and employment loss across different groups. We explore the implications for earnings dispersion and the future path for the employment recovery including persistent and/or permanent effects of the pandemic on labour supply.

Read in full: Distributional effects of COVID-19 – a focus on earnings and participation

Between 2014 and 2020, corporation tax revenue increased by 156 per cent, far outstripping that of other tax headings. However, there are concerns on the long-term reliability and sustainability of such revenues in Ireland. This Box discusses potential risks to future corporation tax receipts arising from proposed changes in international tax rules.

Read in full: Corporation tax risks to the public finances