Labour shortages and wage hikes ‘will affect economy from next year’

Economist Kieran McQuinn of the ESRI has warned that the national unemployment rate will fall to 4% next year, fuelling sharp wage increases

Kieran McQuinn, research professor at the ESRI: ‘What history shows us is that once the unemployment rate falls below 4 per cent, wages really begin to take off in the Irish economy.’ Picture: Bryan Meade

The Irish economy is set to hit significant capacity constraints from next year due to escalating labour shortages and wage inflation, a senior economist has warned.

Kieran McQuinn, a research professor at the Economic and Social Research Institute (ESRI), said that Ireland’s unemployment rate will average 5 per cent this year, and is set to fall to 4 per cent in 2023, which he predicted will fuel sharp wage increases and lead to increased labour ...