Outline, using appropriate figures, how the Irish economy has performed in the last 12 months in each of the following areas: - Economic growth - Price level - Unemployment - Interest rates - Leaving Cert Economics - Question 8 - 2016

The price level in Ireland has remained relatively stable, with inflation rates hovering around 1-2%. This stability has been supported by controlled increases in wages and prices in the housing market, contributing to consumer confidence.

The unemployment rate has decreased to around 5-6% over the last year, indicating a recovering labor market. This reduction is due to increased job creation in sectors such as services and technology.

Interest rates have remained low, with the European Central Bank maintaining rates around 0%. This has encouraged borrowing and investment in the economy, supporting further growth.

The Irish Government has implemented several measures to reduce the budget deficit and gross debt. Key strategies include:

1. Spending Cuts: Aggressive reductions in public spending, particularly in non-essential areas, helped balance the budget.

2. Increased Revenues: The government has also increased tax revenues through measures such as raising the VAT rate and broadening the tax base.

3. Economic Growth: A recovering economy led to higher tax revenues from businesses and individuals, contributing to a decrease in the deficit.

These measures have effectively slashed the budget deficit to about 1% of GDP.

While achieving reductions in the budget deficit and debt is beneficial, there are potential costs to society:

1. Public Services Impact: Cuts to public spending can adversely affect essential services like healthcare and education, leading to reduced quality and access.

2. Social Disparities: Measures may disproportionately impact lower-income individuals, potentially increasing inequality.

3. Economic Growth Risks: Overly aggressive austerity measures might stifle economic growth in the long term if investment in critical infrastructure and services is neglected.

The increasing urbanisation of Ireland has both positive and negative economic consequences:

Positive Consequences:

• Economic Growth: Urban areas typically generate higher economic output, with more job opportunities and investments attracting businesses.
• Infrastructure Development: Increased urban populations often lead to better infrastructure, including transport, which can further drive economic activity.

Negative Consequences:

• Housing Shortages: Rapid urbanisation can lead to housing shortages and increased property prices, making living costs unaffordable for many.
• Social Strain: Increased population density may strain public services such as healthcare and education, making it difficult for the government to meet the needs of its citizens.