By Harry Keaney
Irish Finance Minister Charlie McCreevy has spoken out this week about fears that the booming Irish economy may be heading into an inflationary downspiral.
“I don’t think we should allow ourselves to be talked into an inflation psychology,” McCreevy said. He added that last January there “was a marked attempt by some business people and some commentators who wanted to use it as an opportunity to jack up prices.”
In an interview with the Sunday Business Post newspaper, McCreevy said the latest inflation figure of 2.7 percent posed no danger, as long as government spending increases, and particularly public service pay, were controlled.
Despite McCreevy’s comments, there is concern in Ireland that rising prices – inflation, in other words – could be the needle that might eventually prick the economic bubble. And some economists have expressed the opinion that expected tax reductions and reform, as well as wage increases, could also cause the economy to oveheat.
Food prices, which account for about a fifth of the Irish inflation index, rose one percent in May while housing costs rose 0.7 percent. Since May of last year, food prices have rose 4.9 percent while services costs are up four percent. Housing costs were up due to higher rent costs while medical fees, package holiday charges and accommodation charges also rose.
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Meanwhile, you have heard about the Celtic Tiger economy. Now comes the BMW economy. According to a new report by NCB Stockbrokers, the Republic of Ireland is on the way to becoming one of the BMW economies of Europe. The report states that during the next decade, the Republic of Ireland will become richer than the Germans and French are now, the number of cars on Irish roads will rise by a whopping 60 percent and the population will grow to more than four million. Ireland’s young population means that unlike most European states, Ireland will not face a drag on its prosperity from large numbers of people retiring. However, concern is growing in some quarters in Ireland about the consequences of more cars on the roads, congestion, and frenzied demand for sky-high priced property.
IBO’s trade show
Ever wonder what members of the Irish Business Organization of New York do for a living? The answer, at least in part, can be found June 24 when the IBO holds its third annual trade show at the 200 Fifth Avenue Club, located at the International Toy Center, at 23rd Street and Fifth Avenue. The show will be open to the public in the grand ballroom from 4-9 p.m. At 8, a traditional Irish pub will open in the Oak Room. There will also be Irish traditional music.
The trade show will be officially opened by the president of Ireland Mary McAleese during what will be her first official visit to the U.S. since her election to succeed Mary Robinson last October.
During the show, more than 60 members of the IBO will showcase their businesses and display their wares and services.
Euro information blitz
The campaign to introduce the Irish public to the changeover from Irish currency to the euro began last week when more than a million information leaflets were printed for distribution to every house in Ireland. The leaflet illustrates the euro notes and coins. Information on the euro is available from Forf_s, Wilton Park House, Wilton Place, Dublin 2. Telephone, 011-353-1- 607-3299.
Travel tip for North
CIE Tours International is now offering a nine-day tour focusing on the scenic, historic and cultural highlights of Northern Ireland. The tours are priced from $1,601 and operate weekly on Fridays through Oct. 2 CIE Tours also has a three-day “Dublin at Leisure” vacation package priced from $345 per person plus airfare from now to Oct. 31. For information, call a travel agent or 1-800-CIE-TOUR.
Another top job opening
Kieran McGowan, chief executive of the Industrial Development Authority, will retire at the end of this year. McGowan has been with the IDA for 32 years and has served as chief executive for eight. Taoiseach Bertie Ahern described McGowan as “a practical patriot” while IDA Chairman Denis Hanrahan said that when Ireland’s economic history was written, McGowan would emerge as one of the giants.
Phone licence decision expected
A decision is expected this week as to who has won the tender for Ireland’s third mobile phone licence. There are two contenders. They are Orange, which won the fourth mobile licence in Britain, and a consortium called Meteor which includes Irish company RF Communications and U.S. operator Western Wireless and the Walter Group.
A round of golf?
Denis O’Brien, the chairman of Esat Telecom, is close to signing a deal to purchase a golf course in the Algarve region of Portugal in a personal capacity for about _25 million, the Irish Times reported on Saturday. The purchase price would represent about a quarter of O’Brien’s personal wealth which comes from his large shareholdings in Esat Telecom and various radio stations, including Dublin’s 98FM.