Belfast Telegraph

Irish economy 'set to grow by more than 5% next year'

The economy is set to grow by more than 5% in 2018 - higher than previously expected, the Taoiseach has said.

Leo Varadkar also said there will be a major focus next year on improving living standards through higher pay, lower taxes or reducing the cost of GP visits, childcare or insurance.

This can be achieved through better employment, new legislation to ban zero hour contracts and movement on pension reform, the Taoiseach added.

The Taoiseach said the 2017 budget was the first budget to balance the books in 10 years.

"That puts the State in a very good position financially to weather any storms, future downturns or absorb shocks as they arise in the future. People will start to feel the effect of the budget for real in their pay packets over the next couple of months," he said.

Mr Varadkar said tax reductions and minimum wage increase will start kicking in from January.

"Economic growth is ahead of expectations. We expect the economy will grow by more than 5% this year, that's a bit better than expected.

"Unemployment is about 6% and long-term unemployment, people out of work for more than a year, is down at around 3%. We expect that to fall.

"The national debt is also falling and we have indicted our intention to pay off our loans to the IMF early and that is also in train," the Taoiseach said.

A rainy-day fund, due to be established in 2018, will be kick-started with 1.5 billion euro he added.

Another 500 million euro will be added in 2019 and 2020.

"That's designed to be a buffer and insulate us from any future shocks that may occur " said Mr Varadkar.

He warned that although economic growth is currently ahead of expectations, it could slow down next year.

"There is a risk, as is always the case for a growing economy with low unemployment, of repeating the mistakes of the past and actually making government decisions that could overheat the economy.

"We know that if we increase capital spending too quickly, even though we all want more hospitals, schools and houses, all you do is drive construction inflation and you end up getting the same number of schools but you pay more.

"We also know that there are risks, in terms of competitiveness, if we let pay grow too fast and potentially becoming less attractive to employment into the future. We are going to have to balance those things," said the Taoiseach.

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