Foreign direct investment (FDI) had been the most important factor in determining the pattern of Irish growth in recent years and future flows will depend crucially on the US economy, the OECD's head of the Ireland desk said yesterday.
Speaking at UCD, to a conference on "Understanding Ireland's Economic Growth", Dr Peter Jarrett said that the recent slowdown in EU growth might matter less for the State's performance in 1999 than the maintenance of robust increases in US activity, which should sustain the flow of investment.
"If the US enters recession in the next year, if there is overheating and the Fed takes the punchbowl away, I think the flow of direct investment would slow," he said.
Whether that would be a trend or a cycle was the question. But the State's golden age would end as the convergence process with EU economies ended.
He added that the introduction of a minimum wage next year at a high level in relation to median earnings "could well destroy jobs". Its incidence would fall most heavily on youths and those in outlying areas.
