Ireland’s GDP falls even as economy booms, economists warn
Dublin: Even as Ireland’s domestic economy continues to grow, economists say that the decline in GDP should be taken seriously. The ESRI’s new quarterly economic interpretation, released last week, indicated that Ireland’s GDP was declining.
A record gain in unemployment, strong wage growth, and strong consumption continue to slow GDP growth. ESRI estimates that it fell by around 5% to just 0.1%. But it is reassuring that there are those who point out that this is just a temporary phenomenon.
Those who claim to be humble
According to a group of economists, GDP is the accepted measure of a country’s economic activity. The GDP of Ireland was ranked first in the Eurozone league table. They say it was also highlighted as a measure of per capita wealth, along with Singapore and Switzerland.
They observe that the activities of large multinational corporations in Ireland are causing the GDP to fall. The transfer and depreciation of intellectual property rights and the status of the headquarters of aircraft leasing companies had a major impact on this data. They argue that in the context of global deregulation, the tax-free transfer of multinational assets is no longer an indicator of economic activity and is a drag on GDP.
They believe that Ireland is not a rich country as many people think. They also note that such a ‘gain’ has been brought to the country as a result of the wrong use of traditional statistical data.
The decrease in GDP is estimated by calculating the expected decrease in exports and increase in imports in the pharmaceutical sector. During the pandemic, the pharmaceutical sector experienced rapid growth, but it has since fallen precipitously. They also believe it has had a significant impact on the GDP.
The counterargument is that there is no point in worrying.
Dave Murphy, CEO of international project management contractor PM Group, says that although the ESRI report is surprising, there is no need to worry. He claims that these drops are only temporary.
Companies such as Lilly in Limerick and Pfizer in Grange Castle are planning major capital investments in the pharmaceutical industry. Merck Sharp & Dohme is also expanding across all of its sites. As a result, he believes there should be no doubt about the growth.
He does, however, predict a slight slowdown in GDP. However, it is not as severe as predicted by ESRI. Conall McCoy, an economist, also predicted a drop in Irish GDP in the first quarter of this year.
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