"Ireland's fiscal policy looks pro-cyclical right now, which creates immediate risks such as overheating, and longer term risks such as the need to continue with a pro-cyclical fiscal stance in any downturn, thereby magnifying the downturn,"
"We see merit in moving to a situation where underlying surpluses are achieved."
"The economy does not need that level of fiscal support,"
Multiple fiscal watchdogs including the ESRI, the Central Bank, and the Irish Fiscal Advisory Council warn that a proposed €9.4bn package of extra spending and tax cuts risks overheating the Irish economy. Evidence indicates the economy is performing at or above potential output, making additional stimulus unnecessary and pro-cyclical. Overheating can feed inflation and create capacity constraints that hinder delivery of the National Development Plan and housing targets. Advisers recommend moving toward underlying surpluses and counter-cyclical policy. Temporary cost-of-living measures previously helped vulnerable households, but their phasing out will create affordability pressures for older people and those with disabilities.
Read at Irish Independent
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