- author, John Campbell
- Role, BBC News NI Economics and Business Editor
The Irish government’s public investment plan needs to be reviewed to take into account economic growth and a rising population, a leading think tank has said.
The National Development Plan (NDP) was published in 2018 and updated in 2021.
It set out a €165bn (£142bn) program of infrastructure investment in things like housing, transport and energy.
But the Economic and Social Research Institute (ESRI) said the plan “may have underestimated what is needed”.
He added that the challenge now is how to increase investment without stoking inflation.
The government has asked ESRI to assess what has changed since 2021, which will impact investment needs and the economy’s ability to achieve them.
The main developments were the strong economic recovery from the pandemic and rapid population growth, driven by migration.
This means, for example, that “current housing supply targets are almost certainly below needs, given the stronger-than-expected increase in population shown by early results from the 2022 Census,” ESRI said.
“Therefore, higher production will be needed,” she added.
However, the very low unemployment rate means that it will be difficult to grow the construction workforce needed to build all the intended projects.
Alan Barrett, director of the ESRI, said the Irish government faced a dilemma.
“On the one hand, there is a clear need to invest in public infrastructure as our population and economy grow and our climate goals remain challenging,” he added.
“However, on the other hand, the economy is operating at full employment level, so the resources needed to accelerate the national development plan are not readily available.”
ESRI has recommended that the government reconsider the sequencing of projects and perhaps prioritize those that have the potential to mitigate inflationary pressures or that require less labor intensity.