Irish Gross Domestic Product expands by 3.5% exceeding forecasts
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Irish Gross Domestic Product (GDP) expanded by 3.5% in the three months from July to September, exceeding prior forecasts of 2%, the Central Statistics Office (CSO) has found.
Releasing its latest national accounts on Thursday, new figures show the increase was underpinned by a strong multinational sector and rising expenditure.
According to the CSO, the globalised industry sector expanded by 14% between July and September compared to the prior three months, while the information and communication sector posted an increase of 6.3%.
Overall, the combined multinational-dominated elements of the industry and information and communication sectors rose by just over 9% in the three months.
The CSO also found that modified domestic demand (MDD), a measure of Ireland's domestic economy that discounts multinationals, grew by 1.3% in the three months.
MDD is an important measure of underlying demand and excludes Intellectual Property Products (IPP) and aircraft leasing-related globalisation effects.
The Government has forecast that MDD will grow 2.5% in 2024 as a whole, and 2.9% in 2025.
New figures also show an expansion of the domestic sector, which rose by 1.5% in the period, underpinned by increased activity in the finance and insurance, and professional, administrative and support sectors. The construction sector rose by 3.5% in the three months, with real estate activities up by 2.6%.
Meanwhile, investment in capital formation rose by almost 212% or €18.6bn compared with the previous three months, however, the CSO noted that this was due to a significant export of Intellectual Property (IP) arising in the three months between April and June from global corporate restructuring in the multinational sector.
Net exports in the period dropped by almost 27% in the period, reflecting a decrease of €16.6bn.
Government spending on goods and services rose by 1.5% in the period, while personal spending on goods and services, a key measure of domestic economic activity, decreased by a modest 0.2%.
Speaking on figures for the first nine months of the year, CSO statistician, Gordon Cavanagh noted: "Results for the year-to-date compared with the equivalent period of 2023 show GDP contracting by 1.7%.
"Factor income outflows were €12.2bn lower than in the first nine months of 2023, leading to an overall increase in Gross National Product (GNP) of 2.2% for the first nine months of 2024 compared with the equivalent period of 2023."
Compensation of employees rose by 0.6% in the three months, the CSO added, while Ireland's balance of payments recorded a surplus of €23bn in transactions with the rest of the world.
Commenting on the CSO's figures, Minister for Finance Jack Chambers said that importantly, growth on an annual basis has been broad based in nature with both consumer spending and modified investment making a positive contribution.
"This solid growth is consistent with the strength of our labour market and the robust exchequer figures released yesterday. Taken together these metrics all demonstrate that the economy has performed strongly this year."
However, Mr Chambers noted that while today's figures are encouraging, they are backward looking.
"The economic outlook has become increasingly uncertain and risks are now clearly titled to the downside with the most pressing risks external in nature.
“Put simply, these are risks that we cannot control directly – we must instead focus on managing what is in our control. In particular, we must continue to build up our fiscal buffers, invest in our people and our infrastructure, and ensure the economy remains competitive.
"This will help ensure that we are in the best position possible to address future challenges."