This may not occur without some setbacks for the euro over the next year. Overall, however, the period of very easy monetary conditions experienced by the Irish economy since 1999 will become somewhat more restrictive over the next 12 to 18 months. The strong growth in real GDP has produced a remarkable turnaround in the Irish labour market. The Irish economy has achieved full employment. The demand for labour remains very buoyant.
Latest figures suggest that the rate of growth is slowing.
The latter represents a rise of 60,000 people, down considerably from the near 100,000 increase in 1999. This decline in the growth in employment is a consequence of the dwindling supply of labour. The Irish rate of inflation has risen sharply over the past year. The bulk of Irish inflation is externally determined. This is not to deny that part of Irish inflation has been generated by domestic factors.