DUBLIN: Ireland’s economic growth rate bounced back in the third quarter after a weak start to 2016, according to new figures from the Central Statistics Office (CSO).
However, the figures are again affected by the activities of multinationals, with a significantly slower rate of growth in the domestic economy than shown in the headline figures.
Gross domestic product (GDP) rose 4 per cent versus the second quarter, while gross national product (GNP), which strips out the effect of multinational profit repatriations, increased 3.2 per cent.
On an annual basis, GDP was 6.9 per cent higher compared to the same quarter in 2015, with GNP up 10.2 per cent.
However, the latest figures were again influenced by financial flows related to big multinationals in Ireland involving the treatment of intellectual property and profit repatriations. This led to a large fall in the measured level of investment and also to a big drop in imports.
The CSO said that elsewhere investment increased, with a 3 per cent rise in spend on machinery, led by aircraft, and a 4.6 per cent jump in construction.
Commenting on the data, Dermot O’Leary, chief economist at Goodbody, said a more meaningful gauge than the GDP/GNP figures was core domestic demand, which shows the economy growing by about 3 per cent; still double that of the euro zone average.
The three largest sectors of the economy experienced growth during the third quarter, with industry rising 3.8 per cent in volume terms. Distribution, transport, software and communications increased 5.3 per cent, while “other services” grew 1.5 per cent.
