10 Jan 2018

If the Irish are 'wealthier than ever', why don't we feel it?

This year marks a decade since recession hit Ireland in 2008. Economically -- on paper at least -- the recovery has been remarkable. Yet the headline figures on economic progress hide recession scars, which many households are still suffering.

Ciara Kenny
Ciara Kenny The Irish Times, Ireland
Source: The Irish Times
If the Irish are 'wealthier than ever', why don't we feel it? - NewsMavens
Homeless man. Wikimedia COmmons

Why this story matters:

economy, family

Unemployment has fallen right back to just over 6%, from a peak of over 15% in 2012, and this week, a report published by business group Ibec forecast economic growth of 4.2% for 2018, on the back of 5.9% growth for 2017.

The same report declared that the "net wealth position" of Irish households has never been better. Disposable incomes recovered to 20,379 euros per year in 2016, after dropping to 18,078 euros in 2013. In fact, the amount households have to spend after tax is even higher now than it was in 2006, before the crash. Disposable incomes in Ireland are growing at 4 times the European average.

So why, asks Irish Times finance journalist Fiona Reddan, are many of us not feeling so flush?

Housing costs have a huge part to play, she explains. Property prices have soared, with the cost of buying a new home now “higher than its peak in 2005”, according to Ibec. Rents have also risen to record highs, growing at more than 6 times the median of the other EU15 countries in 2017.

We are also still heavily in debt -- Irish households are the fourth most indebted in the EU.

Responding to the Ibec report, campaign group Social Justice Ireland said almost 800,000 people are still living in poverty in Ireland, including about 250,000 children. As Irish Times columnist Cliff Taylor outlined in a recent piece marking the 10th anniversary of the recession, about one in 10 households is in negative equity, more than 8% of the population live in consistent poverty and 7% of mortgages are still more than 3 months in arrears.

“Christmas highlighted the dichotomy in economic fortunes. Tills were ringing, Retail Ireland said sales would approach the 2007 record, and many restaurants were heaving," he writes.

"But tents and sleeping bags remain common in our cities and towns, there were queues for hostels and the Capuchin centre in Dublin said the number of food parcels it gave out was up threefold compared with 5 years ago.”

The headline figures on economic recovery hide recession scars, which many households are still suffering.

Details from the story:

  • Unemployment in Ireland is now at just over 6%, down from 15% in 2012.
  • The Irish economy is forecast to grow by 4.2% in 2018.
  • In 2017, Irish rents grew at over 6 times the median of the other EU15 countries.
  • Almost 800,000 people are still living in poverty in Ireland, according to Social Justice Ireland.
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