Ireland In ‘Technical Recession’… GDP Falls For Second Consecutive Quarter
Dublin: Despite claims of record tax revenues and job creation, Ireland’s financial system is not “safe,” says the CSO report. The decline in GDP for two consecutive quarters prompted this observation.
According to the CSO, the value of the multinational company sector fell by 9% in the first three months of this year. This gap is thought to be caused by large corporations’ unwillingness to invest and create jobs. This will have a negative impact on the economy’s progress.
There was a slight decline in GDP in the last quarter of the previous year. This supports the CSO’s assessment that the country is in a technical recession, which has persisted in the first quarter of this year. One of the international measures of recession is a country’s GDP falling continuously.
According to the CSO, the country’s GDP fell by 2.8% over the entire period. The CSO discovered this disparity by comparing GDP levels in the first three months of 2023 to those in the last quarter of the year prior.
Multinational companies back off…
As per CSO data, multinational companies’ investment in intangible assets in Ireland fell by 16.5 percent. This GDP phenomenon, known as the leprechaun economics effect, has existed in the Irish economy since 2015. The report also indicates that inflated figures for investments in intangible assets by multinational companies in Ireland have distorted the country’s economic data.
as well as growth prospects.
At the same time, CSO figures revealed that the country’s domestic economy grew modestly. In the first quarter of 2023, modified domestic demand (MDD), which includes personal, government, and investment spending, increased by 0.1 percent. The figures also show that the Irish economy grew by a record €500 billion compared to last year.
Supply, transportation, hotels, and restaurants grew by 16.9 percent, while agriculture, forestry, and fisheries grew by 6.3 percent. Meanwhile, the finance and insurance sectors shrank by 7.8 percent, the figures show. According to the CSO, GDP increased by 9.4 percent last year due to strong growth in exports and multinational corporations. Domestic demand is expected to grow by 6.7 percent in 2022. Personal spending has increased by 9.4%, exceeding pre-Covid levels.
Encouraging
Finance Minister Michael McGrath said that this shows the recovery of the economy. Despite the high inflation rate, the minister observed that the increase in consumer and investment spending is encouraging.
CSO Assistant Director General Jennifer Banim said the growth is a reflection of the easing of pandemic-related restrictions.
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