Experts have claimed that an economic recession is on the way for Ireland as the cost of living crisis continues.
Earlier this week, the government confirmed that it is unlikely that additional measures to tackle the increase in inflation would be introduced before Budget 2023 in October.
Taoiseach Micheal Martin said today that the Budget would be the focus of the government’s efforts to try and mitigate the cost of living increases.
READ MORE: Top minister warns recession is looming in Ireland as Taoiseach offers update on crisis
However, Tanaiste Leo Varadkar said on Wednesday that he was not “ruling out” further action between now and October should prices increase considerably.
Questions have been raised over the possibility of recession as Eurozone countries met today at the EU Council to discuss their current economic situation.
The Taoiseach said that globally, recession is a risk but “not a given”.
He was joined in Brussels by Minister of State for EU Affairs Thomas Byrne and Minister for Finance Paschal Donohoe, who currently holds the presidency of the Eurogroup.
Minister Donohoe presented to leaders from across the EU about developments in the European economy.
Members also discussed how Russia’s war on Ukraine had affected food and energy prices.
Speaking after the meeting, the Taoiseach said: “As far as I’m concerned – and it’s not just me, we’ve had discussions in terms of the three party leaders and the Minister for Finance and Minister for Public Expenditure – there’s no question but that a Budget is the optimal way to deal with this crisis.”
“People are under a lot of pressure now. We have already taken measures, but it seems clear to me now, following the consultations I’ve had across Europe, that there will be a lot of pressure on us again in the autumn and winter period, and we’ve got to prepare a comprehensive package to deal with that.
“We’ll use the budget in terms of further measures to alleviate pressures on people but also position the economy for the next 12 months to focus on areas of expenditure that will deal with the pressures that are on people, but that also gives us a sustainable pathway forward on issues like childcare, climate and so on.”
He said the energy cost would be “significantly problematic moving into the autumn”.
Minister Donohoe said eurozone countries must avoid the massive inflation seen in recent months becoming normalised.
He said he would tell the EU Council members that the expectation is still that the economy will grow.
However, he stressed that “we do need to acknowledge the risk that we could face if inflation does become embedded into our economies”.
“It is in all of our interests that [with] the inflationary pressures that we’re now facing, measures are put in place to do two things.
“Firstly, to avoid the risk that these pressures become part of our medium-term outlook and become embedded in our economies, but secondly, as actions are being taken to prevent that development, that governments also put in place appropriate measures to support those who were hit the most by the rising cost of living.”
He said that “for many at the moment, the cost of living and how quickly it has increased is now leading to a very rapid fall in living standards."
READ NEXT:
