Banking, housing remain challenges to Ireland's competitiveness, NCPC report says
The Government has made 'substantial progress' on key recommendations for the economy's competitiveness, but further work is needed in housing and retail banking competition, a new report has said.
The review from the National Competitiveness and Productivity Council said vital competitiveness areas covering planning delays, energy infrastructure, and meeting climate targets also required more action.
The report looked at 79 recommendations made between 2020 and 2023 and concluded that the Government had fully delivered on 45, with the remaining 34 classed as 'in progress'. Among the key areas reviewed were macroeconomic sustainability, business environment, education and skills, and technology and innovation.
Of those 34, some have been consistently highlighted by the NCPC in previous reports.
In retail banking, for example, the council noted it had highlighted the lack of robust competition in three separate recommendations, and noted there was a need for greater urgency in following through on the outcomes. The report found interest rates for loans to non-financial corporations in Ireland have been consistently higher than in euro area overall, impacting small and medium sized enterprises.
The review is the first by the council that looks at the degree of progress made by Government on delivering on each of its previous recommendations. The organisation makes up to 20 recommendations each year to the Government in its Competitiveness Challenge report.
Competitiveness has become a key issue at EU level, with the bloc seeking to close the innovation gap with the US.
The NCPC report also noted that Ireland performs well in basic digital skills, but is falling behind its EU peers in scientific infrastructure and certain research and development metrics.
'The lack of progress on these recommendations – in particular, given the innovation gap between Europe and US – underscores the scope for improvement,' the report said.
Decarbonisation, particularly in the gas network, climate goals and progress on the R&D tax credit are also areas in which Ireland still needs to make progress, the NCPC said.
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