While the economy is “doing well” many on lower incomes are not benefiting as they should with almost 800,000 people living in poverty, Social Justice Ireland has said.

The independent think tank and justice advocacy organisation said a quarter of a million of these are children, while one million people in Ireland are experiencing deprivation.

Dr Sean Healy, director of Social Justice Ireland said despite an increase in average incomes and other signs of economic recovery, “these figures show that a significant proportion of the population is still living in very difficult circumstances”.

“These figures are unacceptable in a rich, developed country like Ireland.”

The organisation was reacting to Ibec’s latest quarterly economic outlook, which said Irish households have never been wealthier.

The employers’ group said the Irish economy has moved beyond the recovery phase and into a period of “strong and sustainable growth” with expansion forecast to reach 4.2 per cent in 2018.

It said 55,000 net new jobs were created in the economy in 2017 and the disposable incomes of Irish households are growing at four times the euro-zone average.

Eamon Murphy, economic and social analyst at Social Justice Ireland said “it is extremely worrying that despite falling unemployment and Ireland allegedly having the fastest growing economy in Europe, there is little relief for the working poor”.

“There has been no change in the number of people in employment who are at risk of poverty. It is clear that a rising tide does not automatically lift all boats, and that specific interventions are required to tackle the problems highlighted.

“If Government wishes to address issues of reducing poverty and ‘making work pay’, policy must prioritise those at the bottom of the income distribution. These policies must be designed to address the wide variety of households and adults in poverty.”

Regional differences

Social Justice Ireland said regional differences also need to be addressed as poverty in the Border, midlands and west regions are more than 50 per cent higher per capita than in the southern and eastern regions.

Ibec predicts that investment in the economy will grow by 10.7 per cent in the coming year, while consumer spending will rise by 3 per cent. It also suggests that exports will grow by 3.8 per cent in 2018, as consumers recover their confidence as the economy nears full employment and household debt levels fall.

Ibec also warned that “the risk of losing competitiveness will need to be carefully managed over the coming years”. It highlighted economic leakages such as cross-Border shopping, and warned that falling food prices are eroding margins for producers.

It said Irish rents are rising at six times the European median and predicts that “a failure to resolve the housing crisis will eventually lead to higher prices on other goods as well”, as it will force employers to boost wages even higher, which will be passed on to consumers.