Ireland’s unemployment rate fell to 6.1 per cent in January from 6.2 per cent a month earlier, the Central Statistics Office said yesterday as the labour force continues to move steadily towards full employment.
Ireland’s central bank estimated last week that the rate would fall to an average rate of 5.2 per cent next year, which is close to full employment. The unemployment rate peaked at over 16 per cent during the most intense phase of the economic crash in 2012.
The Irish economy has been buoyed by a pick-up in domestic spending and investment. It has also benefited from the improving global economic outlook. According to figures released yesterday, the eurozone economy, for so long a source of uncertainty, has enjoyed its best year in a decade, clear evidence it has broken out of the prolonged debt crisis that raised fears about the very survival of the euro.
In its first estimate for the fourth quarter Eurostat, the EU statistics agency, said the eurozone expanded by 0.6 per cent in the October-December period from the three months before.
That means that for the whole of 2017, the eurozone economy expanded by 2.5 per cent, its best performance since 2007, when it grew 3 per cent. The eurozone even grew faster than the US, which expanded by 2.3 per cent.
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“Economic growth has shifted to a substantially faster growth path over the course of 2017,” Bert Colijn, senior eurozone economist at ING, said. “While detailed breakdowns have yet to be released, it seems that the eurozone continues to fire on all cylinders.”
Since 2007 the bloc has had to grapple with one crisis after another, starting with the financial crash of 2008. That exposed the state of public finances in a number of member economies.
Only recently have existential concerns surrounding the euro eased. Greece, notably, is set to emerge from its bailout era this summer, eight years after it first faced potential bankruptcy.
With fears of a break-up largely evaporated, confidence across the bloc has risen. Stronger growth is being recorded in countries that were at the forefront of the crisis and that is helping to bring down unemployment, potentially reinforcing the recovery even more. Since the defeat of populist movements at elections last year in France and the Netherlands, there are fewer fears of anti-euro politicians taking the helm. The recovery has been boosted by the European Central Bank stimulus programme and its cuts to interest rates.
But it is not just about improvements in the eurozone. The global economy is on the up and that is helping exporters.
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That combination of positive factors is expected to hold in 2018 with growth at 2017’s level. Two potential headwinds are the rise in the value of the euro against the dollar, which makes eurozone exports less competitive, and reduced stimulus from the ECB.