Ireland’s Macroeconomic Scoreboard 2020, which screens for potential macroeconomic imbalances in the Irish economy, shows that this country has breached four out of 14 EU thresholds, down from a high of 10 in 2011, but up on the 2019 figures.
The scoreboard is an EU-wide measure of economic imbalances in member states’ economies and measures a range of indicators .
It includes indicators designed to measure economic competitiveness, for example the current account balance, export market share and labour costs, and also includes indicators designed to screen for internal imbalances such as unemployment.
CSO statistician John Sheridan said: "The breaches for 2020 include activity rate at -0.8% (measured as a three-year percentage point change), which breached its threshold of -0.2% for the first time since 2012.
Recurring imbalances include international investment position at -174% of GDP which again breached the EU threshold of -35%, and current account balance at -5.9% of GDP, which breached its threshold of -4%.”
Finally, private sector debt at 188.9% of GDP continued to breach the EU threshold of 133% this year.
Private sector debt
“However, the combined total of Irish-owned debt (households and Irish non-financial corporations) was below the EU threshold, and made up less than half of total private sector debt," Sheridan said.
The CSO’s publication draws on sources from across the CSO and provides additional analysis on a wide range of indicators, including analysis using the CSO's modified gross national income and modified current account measures.
The Macroeconomic Imbalance Procedure (MIP) is an annual process which the European Commission undertakes, using a scoreboard of 14 headline indicators and 28 auxiliary indicators.
This screens for any macroeconomic imbalances that may occur in member states. Each of the 14 headline indicators have a threshold, set by the European Commission, beyond which economic imbalances are determined to have occurred.
The financial crisis in 2008 highlighted the importance of the early detection and correction of macroeconomic imbalances across EU countries and the euro area
In response, the European Commission developed the MIP, which came into force in December 2011 as part of the 'six pack' of legislative acts, which strengthens the monitoring of macroeconomic policies in the EU and the euro area.