Households of Ireland, Book Review Example

The Central Bank of Ireland reports on households in Ireland and the economic factors that determine their findings. One of the most dynamic economies in Europe in the years pre- -and also one of the most ravaged by the great recession. Ireland grew 6.5 % year-on-year in the first quarter of the year, as has been made public this Thursday the irish office of statistics. This rate places it in the path to become the fastest growing economy for the second consecutive year: in 2014 expanded 5.2 %, the highest figure since the outbreak of the crisis that led to the financial rescue of the island in the autumn of 2010.

The meteoric beginning of the year for the Irish economy is visible, also, in relation to the previous quarter, with growth of 1.4 % that has exceeded the forecast with clearance that predicted a 1.2 % and that has been close to the 1.5 %. The causes of the expansion: the rebound in exports ( 2.3 %) and private consumption ( 1.2 % ).

The reported HFCS field work reports 5,419 households housing 14,546 individuals. With the unemployment rate in clearly declining path – in june, closed at 9.7 %, almost two points less than the same month the previous year, the Central Bank of Ireland on wednesday revised its forecast for growth for this year and the next until the 4.1 % and 4.2 %, 0.3 % and 0.5 % more than was expected earlier.

Like the rest of the European economies, the Irish benefits, in addition, the tail wind purchase program of quantitative expansion (QE, for its acronym in english) of the ECB and the low prices of the raw materials, especially petroleum, to be net importer.

In recent years, Ireland has been, along with Spain and Portugal, the example shown as the “exemplary” model to follow for the rest of countries that have needed the European financial aid. Dublin put an end to the rescue at the end of 2013 without a necessary financial cushion later. Since then, the Irish economy has done nothing but grow: 0.2 % in 2013 and 5.2 % in 2014.

Agriculture, which once was the most important sector, is now dwarfed by industry, which represents 38% of the GNP, around 80% of exports and employs 28% of the labor force. In spite of maintain its robust growth fundamentally based on exports, the economy is also being benefited by an increase in the consumption and the recovery of investments in business and construction. Ireland is one of the largest exporters of goods and services related to the software in the world. In fact, much software abroad, and sometimes music, is filtered through the Republic to take advantage of a policy based on does not collect taxes and royalties from property with copyright.

These purposes are not surprising given the high level of indebtedness of the Irish homes and taking into account that, unlike other countries in your environment, such as England and Wales, which are characterized by having bankruptcy systems so favorable to the debtors to be defined as paradise of the debtor, the Irish law is defined to times the prison of the debtor (here).

In January 2012 the Government of Ireland issued a clear indication of its plans for the reform of the legislation on personal insolvency. The Personal Insolvency Act 2012 has been published on June 29 2012, has been approved in Parliament on 19 December 2012 and, as I said, this has become an act on 26 December 2012.

It is possible that the news repeated on the reform process, as well as the expectations of a more rapid conclusion of the reform process (which has been characterized for example by the breach of the commitment to publish the text of the law in the first quarter of 2012) have generated a false impression that the reform is already in force for a long time and is yielding results, for example on the mortgage delinquency.

During the 1990s, the Irish government launched a series of economic programs designed to curb inflation, relieve the tax burden, reduce government spending as a percentage of GNP, increase the skills of the workforce to training base and promote foreign investment. The State joined the initiative of the euro in January 2001 (leaving the Irish pound) along with ten other nations of the European Union. This period of high economic growth led many to baptize the Republic the Celtic Tiger. The economy felt the impact of the slowdown in the global economy in 2001, particularly in the export sector of advanced technology, where the growth rate was reduced to practically half. The growth of GNP remained stable and relatively robust, with a rate of about 6% in 2001 and 2002, but this was expected to fall to 2% by 2003. Since 2001 the growth of GNP has been far worse, a third less than the previous year.

Finally, the global crisis highlighted the fragility of this miracle, with a balance bleak: the growth of Ireland is negative and unemployment in order to 2009 could reach 14 percent of the workforce (4.3 , 2006).3 The government has had to guarantee bank deposits by 105 billion dollars, nationalized the Anglo Irish Bank and adopted a rescue of entities by about 7,500 million dollars. Its fiscal deficit already exceeds 6 percent of GDP in 2008 and to reach 11 in 2009. The government wants to reduce the wages of public employees.

Property assets experience their peak in the 60-69 age group. After having suffered the international financial crisis and then the crisis of the euro zone, the Irish economy shows signs of resumption. After experiencing a growth of 0.6 % in 2013. According to estimates, growth reached between 3.6 % and 4.7 % in 2014.

Ireland left behind their rescue plan in December 2013, and is once again a sovereign country financially. The country remained at the foot of the letter the councils of the troika (IMF, ECB, EC), and implemented a policy of austerity to basis of a tax hike, low of the salaries of civil servants and budget cuts. International investors have regained the confidence and the banking sector has stabilized. At the end of 2014, the State submitted a budget increase for the first time since 2008. The government deficit increased from 32% of GDP in 2010 to 3.7 % in 2014. However, the young Irish continue migrating en masse in search of work. In October 2014, the population expressed against a measure which cancels the gratuitousness of the water. Ireland momentum fiscal reforms in 2014, as the measure that puts an end to the possibilities of tax optimization for foreign companies (which will take effect in 2020).  However, it will be replaced by a similar measure, because Ireland wishes to preserve its attractiveness to foreign companies. On the other hand, the tax rates for businesses, the lowest in the world, will not be modified. The government continues in 2015 its policy of fiscal consolidation and structural reforms, but the homes are heavily indebted and foreclosures real estate loan are multiplied. Social discontent is increasing could complicate the stability of the country, without forgetting that the general elections will be carried out in 2016. The unemployment rate reached its lowest level in four years, but remains high, affecting more than 11% of the active population. This may have an effect on HMR debt value as it declines with age.

In conclusion, the report gives detailed insight on the factors effecting household values in Ireland. However, there is not enough information regarding comparisons to other countries. The Mortgage-service to gross income ratio is not detailed enough; nor is the debt to assets ratios of Ireland against other EA economies. Perhaps such information would not be relevant depending on what research is needed for specific analysis.