03-05

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Figure from page 7

Department of Enterprise, Trade & Employment

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Ireland is at a critical juncture in its development. We have come through a period of unprecedented growth in output and employment. That growth took place against a backdrop of favourable global trading conditions and, nationally, positive political developments culminating in the Good Friday Agreement. Domestically, it also reflected a process of accelerated catch up after a long period in which the economy failed to fulfil its potential.

Although the economy is still performing relatively well, it has suffered a significant downturn. This has both domestic and international dimensions. These are explored in the analysis which follows.

Ireland’s economic progress during the 1990s consolidated our position as one of the most open economies in the world. Goods exports rose from 52.7% of GDP in 1990 to 80.1% in 2000. According to the National Competitiveness Councils’ Annual Competitiveness Report 2001, Ireland’s competitiveness score for internationalisation ranks second out of twenty eight countries, displaying a high degree of trade openness and very strong export growth performance, both for goods and services. The Annual Competitiveness Report 2002 notes that in 2001, in a study of 16 countries, Ireland showed the third highest percentage increase in terms of real exports of goods and services, and the second highest percentage increase in real imports of goods and services.

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The report further points out that, from 1989 to 1990, Ireland’s growth rate stood at almost 15%, ranking fifteenth out of twentynine countries. From 1997 to 1998 the growth rate was 20%, elevating Ireland to a ranking of second in the comparison group. Although export of goods and services continues to increase, the rate of export growth has since fallen in response to the downturn in global demand. According to the Spring 2003 Quarterly Economic Commentary from the ESRI, real annual export growth in 2001 and 2002 amounted to 6.7% and 4.5% respectively; the commentary further estimates export growth in 2003 and 2004 at 4.2% and 4.4% respectively.

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