The economy grew by 7.8% of GDP last year, according to preliminary estimates from the Central Statistics Office, making it the European Union’s fastest-growing economy for the fourth year in a row.

Measured by GNP, the economy grew by 6.6% in 2017, the CSO said.

The CSO said that Modified Domestic Demand – a new measure used in Ireland to remove the distorting effects of foreign multinational companies – showed growth of 3.9%.

This suggests that the wider economy is feeling little initial impact from Brexit.

Today’s figures show that Personal Consumption Expenditure grew by 1.9%. This is regarded as an important barometer of the performance of the domestic economy.

Consumer spending on goods increased by 4.6%, while spending on services was marginally negative at -0.1%.

The CSO said that industrial output grew by 8.9%. In the ICT sector output increased by 16.8%, while financial and insurance output fell slightly, down by 0.7%.

Capital investment showed a drop of 22.3% last year, driven by a lower level of Intellectual Property imports when compared with the exceptionally high level of such imports in 2016.

The country’s balance of payments recorded a strong surplus of €37.1 billion, or 12.5%, of GDP.

This compared to a surplus of €9.1 billion in 2016, and €28.6 billion in 2015. The series was also affected by the large level of IP imports in 2016.

The relevance of using GDP as an accurate measure for such an open economy as the Irish economy was called into question when 2015 growth figures were adjusted up after a massive revision to the stock of capital assets related to the large multinational sector here.

While other more stable data point to very strong growth in the real economy, last year net exports were flattered greatly by the absence of large imports of intellectual property and aircraft leasing activity, which have skewed data in the past.

That pushed GDP up 10.9% year-on-year in the third quarter, revised slightly higher today.

This meant annual growth stood at 8.4% in the final three months of the year.

The economy expanded by 3.2% on a quarterly basis from October to December, compared with 4.8% in the previous quarter.

Ireland has rebounded from an economic crash a decade ago that pushed it into an international bailout in 2010, and the momentum has continued into this year with unemployment falling to 6.1% from a peak of 16% during the the crisis.

Data yesterday showed that employment – which analysts say is the cleanest gauge of Irish growth – was just shy of the 2007 peak at 2.23 million at the end of 2017 following a sharp rise in jobs growth in the fourth quarter.

Article

Ireland is the world’s eighth-most “inclusive” advanced economy, based on a measure from the World Economic Forum (WEF), which looks beyond economic growth data to examine living standards, environmental sustainability and protection of future generations from indebtedness.

The ranking marks an improvement on Ireland’s 12th place among 29 advanced economies in a previous report published by the WEF, organisers of the annual Davos conference taking place this week.

“Our reliance on GDP [gross domestic product] of national economic achievement is fuelling short-termism and inequality, and leaders must urgently move to a new model of inclusive growth and development,” according to the WEF report, published on Monday, on the eve of the four-day gathering in the Swiss ski resort.

‘Virtuous circle’

“Decades of prioritising economic growth over social equity has led to historically high levels of wealth and income inequality and caused governments to miss out on a virtuous circle in which growth is strengthened by being shared more widely and generated without unduly straining the environment or burdening future generation,” it said.

The WEF gathering of the world’s political and corporate leaders, alongside a smattering of celebrities, at Davos every year since 1971 has itself been criticized over the decades for its perceived elitist nature.

This year’s attendees include US president Donald Trump, Taoiseach Leo Varadkar, Minister for Finance Paschal Donohoe, French president Emmanuel Macron along with Bank of America chief executive Brian Moynihan, Microsoft CEO Satya Nadella, actress Cate Blanchett and musician and producer Will.i.am.

Norway has topped the list of the worlds’ most inclusive advanced economies, followed by Iceland, Luxembourg, Switzerland and Denmark. The UK came in 22nd and the US 23rd, with Italy, Portugal and Greece taking the bottom three slots on the list of 29 countries.

The index looks at a series of gauges, from GDP per capita to life expectancy, employment rates, median income, public debt, carbon emissions based on the size of the economy and ratio of the young and elderly depending on people in the workforce.

Article in the Irish Times