oecd Archives - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

OECD says Covid-19 support measures may need to be extended

The OECD has said that the Irish economy is set to contract strongly in the first half of this year due to the Covid-19 lockdown as it urged the Government to be prepared to extend existing support measures if required. 

In its latest economic outlook, the Organisation for Economic Cooperation and Development said that GDP here will fall by 6.8% in 2020 and then recover by 4.8% in 2021.

But if a second wave of contagion hits this year, the Irish economy could contract by 8.7% with almost no recovery in 2021. 

It has also predicted that unemployment average between 10.8% and 12.3% this year.

The OECD said that despite supportive economic policies cushioning workers and businesses, depressed confidence and impaired households and business balance sheets will hold back the recovery as the economy reopens.

The Paris-based think tank said the Government should remain prepared to extend existing support measures if required, adding that policies which provide additional liquidity to viable small and medium sized businesses may be needed. 

“Loan guarantees and public equity injections for viable for liquidity-constrained firms should be undertaken as needed,” it added.

It said an increase in barriers to trade between the UK and the European Union as a result of Brexit is also a major risk facing the country as the UK remains a key trading partner.

The OECD also warned that the legacy of the financial crisis makes the Irish economy “more vulnerable”, adding that high household debt, weak bank profitability and high levels of government debt remained key risks.

But on the plus side, it noted that pharmaceutical and medical device industries located here may experience a boom during any recovery. 

The OECD also forecast that the global economy would contract 6% this year before bouncing back with 5.2% growth in 2021 – providing the Covid-19 outbreak is kept under control.  

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5% increase in life satisfaction in Ireland – OECD report

Analysis by the Organisation for Economic Co-operation and Development shows that life satisfaction rose in Ireland by 5% or more between 2013 and 2018.

The How’s Life report, which looks at all aspects of well-being from health and social connections to income and security, shows that since 2013 life satisfaction has either remained stable or increased in most OECD countries.

Ireland was one of ten countries where life satisfaction rose by 5% or more. The other countries were Portugal, Estonia, the Czech Republic, Korea, Hungary, Poland, Spain, Italy and Slovenia.

However, the report also shows less positive findings.

While housing affordability has improved in 11 OECD countries, it has consistently worsened in ten. Finland, Ireland and Portugal now spend over 2% more of their income on housing than they did in 2010.

In terms of working hours, the biggest increase in the number of people spending long hours at work is in Ireland.

The report shows that on average, around 7% of employees in OECD countries routinely work 50 hours or more each week.

However, the “strongest increase” (2%) in people spending long hours at work is occurring in Ireland. 

When it comes to high speed broadband, there are differences in high-speed internet access between urban and rural areas in most OECD countries.

Along with Greece, Portugal, the Slovak Republic, Spain, Lithuania and Hungary, the gap in high-speed internet access between large urban areas and rural areas in Ireland exceeds 11%.

By contrast, the smallest differences (below 1 percentage point) are in Iceland, the Netherlands and the UK.

Less than half of the population in the average OECD country, 43%, trust their national government.

But this represents a slight improvement from the 40% level recorded in the aftermath of the financial crisis in 2010-12.

The largest increases in trust of more than 15 percentage points, occurred in the Czech Republic, Ireland and Japan.

When it comes to greenhouse gas emissions per capita, 16 out of 37 OECD countries have consistently increased their material footprint per capita.

By contrast, three OECD countries with below average footprints bucked the overall trend and consistently improved their consumption of the Earth’s materials – material footprints fell by more than three tonnes per capita in Greece, Ireland and Portugal.

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