Dramatic Demographics: Ireland’s Rapid Population Growth
Recent data from the CSO gives the Irish population at 5.5 million in April 2024 up by 41% since 2001. This is a very rapid rate of population growth. By contrast EU population grew by 5% in the same period. Migration is the key factor and has provided 54% of the total. As is to be expected migration likely also accounts for a high proportion of the increase in jobs. In the year to April 2024 net migration of over 25 year olds, presumably mostly coming to work, was the same as the total increase in employment - 50,000. Over the time since 2001 this age cohort of migrants was equal to about 54% of the increase in employment and suggests about half of employment growth is accounted for by migrants.
Inflation: Moderating Trend
Year to year inflation in the EU held at 2.2% in April, somewhat above the target, but not enough to dissuade the ECB from reducing interest rates which it duly did last month for the seventh time since last year. The situation in the US is not so clear since inflation is appreciably above 2%, the economy is running hot and there are uncertain implications for prices in the President's tariff policy. For the moment the Federal Reserve is holding its hand. In Ireland inflation increased from 2% to 2.2% driven by prices for food and services, especially hospitality . With demand brisk and unemployment low the economy will be lucky if May does not see a further acceleration in Irish inflation. sharp drop in US inflation was a positive feature of the inflation picture in recent days. But the possibility of price increases resulting from US tariff policy, has pushed expectations the other way. It seems unlikely that interest rates will be cut in the US anytime soon. Meanwhile, in Europe things are moving in the opposite direction with inflation falling and the economy still weak. In Ireland inflation picked up in March with the year to year CPI figure for March 2% up compared with 1.8% in February. An important factor has been a sharp increase in food prices.
Economic Indicators Point to Continued Growth in First Quarter.
Available indicators so far this year suggest that the economy has been expanding at a brisk rate. The indices of industrial and service production for February are positive and unemployment in the three months to March is running well below 2024 levels. These trends are confirmed by the AIB Index of Purchasing Managers for March.