2009 GNP: -11.3%; 2009 GDP: -7.1%; 2009 CA/GDP: -2.8%

More releases from the CSO:

The latest national accounts release shows the scale of the contraction in 2009, with national income falling far more than the decline in production (the foreign-owned firms doing better than domestic firms).

The BOP release shows that the current account deficit has narrowed to 2.8% of GDP.

27 thoughts on “2009 GNP: -11.3%; 2009 GDP: -7.1%; 2009 CA/GDP: -2.8%”

  1. Does this mean we are looking at slowing decline in terms of contraction rather than a bottoming out?

    Together with the unemployment figures, does this mean the suggestion that Q4 2009 was a turning point was entirely misplaced?

  2. So, are we officially in a depression now? Greater than 10% fall in GDP over two years normally meets the criteria, and I make ours 9.93% in 2008 and 2009

    2007 GDP = €189,791m
    2009 GDP = €170,934m

    fall of €18,857m, or 9.93%.

    Or does the missing 0.07% mean that actaully everything is alright and I am scaremongering by using the D-word?

  3. These figures and the QNHS release shed some new light on the accuracy of John the Optimist’s claim last September that the recession ended in 2009:Q3. (“I’ll stick my neck out and say that Ireland is now out of recession. I should emphasise that I’m referring to Q3 rather than to Q2.”)

    http://www.irisheconomy.ie/index.php/2009/09/10/presentation-to-the-labour-party/#comment-15547

    After 2009:Q2, seasonally adjusted GDP fell 2.4 percent up to the last quarter of the year and seasonally adjusted GNP fell by 4.1 percent. The seasonally adjusted unemployment rate was 11.5% in 2009:Q2 and appears to have reached 13.3% by February.

    Ireland doesn’t have an NBER-style recession dating committee but, if it did, I’m pretty sure they would not yet be calling the end of recession.

  4. @Karl Whelan, did not get Brain Lenihan’s memo?

    “Excluding the impact of the ongoing decline in new house building, GDP was roughly unchanged in the fourth quarter.”

    So there you have it. JTO was right. GDP did not fall in Q4.*

    *So long as you leave out the parts of the economy where it was falling, of course…

  5. We really need to tell it as it is. Based on all the information we have (i.e Q4 national accounts) the economy is still in decline. That decline has lessened but it is still a decline. Hopefully that means that we’re heading towards the inflection point but we just don’t know. It could just carry on declining at a slower and slower rate. If the government wants to tell a more positive story and genuinely believes we are turning the corner they could try to produce more timely data. Until then it is all speculation.

  6. @Stuart
    Well, it looks as though it is not declining at a slower rate except on a YoY basis. As Kerrynorth on the ‘pin points out:
    “Seasonally adjusted GDP at constant market prices 2009: Table 1.
    Q1: €43.118billion
    Q2: €43.047billion – €71million QoQ
    Q3: €42.659billion – €388million QoQ
    Q4: €42.111billion – €548million. QoQ”
    Yes, the rate of decline compared to 2008 is not as great, but there is a double dip in progress.

  7. @Karl, I’m not familiar with the tea-and-sugar index, have you got the ticker for that one?

    I tried LSE:MRSDYLE but got nothing..

    @Yogan, I think that in order to have a double dip we have to have at least one quarter of positive growth somewhere in the cycle. We are still in the first dip.

  8. @Yogan
    “Well, it looks as though it is not declining at a slower rate except on a YoY basis.”

    That’s certainly not the message we’re getting out there. You have depressed me …. and on my birthday too!

  9. @Stuart
    Happy Birthday.

    Sorry about that, it depressed me too. I can’t see any way of spinning those numbers as good news, backed up as they are by GNP figures (i.e. the MNC part of the economy and the domestic part of the economy are contracting at an increasing rate). Any realistic positive spin appreciated. I had been quite persuaded by JtheO’s analysis as it sat with my own gut feeling from early last year that by the end of this quarter or next at the latest we would be back in positive territory.

  10. @Yogan
    Problem with Jto is he based most of his optimism on exports and these do seem to be recovering (unless you’re going to tell me otherwise). The question is how much that benefits the rest of the economy in reality.

    Anyway I’m off to help the depressed restaurant sector and celebrate my birthday!

  11. @Stuart
    Don’t read Michael Hennigan’s comment then…

    Enjoy! Particularly the miles better service!

  12. So what are the solutions?
    Do we default? (y/n)
    Do we leave the euro? (y/n)
    Do we stop public sector pay cuts? (y/n)

    If we answer no to all three then are we really all that at odds with current government policy? Are we not all part of the consensus?

  13. @Eureka
    “Do we default? (y/n)”
    No, but we don’t guarantee more than we have to either.

    “Do we leave the euro? (y/n)”
    No, but we look to take advantage of it to get our BOP back in the green.

    “Do we stop public sector pay cuts? (y/n)”
    Torn on this one. I’d love to see them deflate gently back due to no nominal rises, but the pay scale system is broken, particularly at the top (not just for the higher grades, but especially for those), so there will have to be reductions in the top of scale and a compression of scales, I suppose.

    We are also going to have to cut numbers, in particular at the quangos, with many of them merged back into their departments, or a slightly enlarged “department of the ombudsman”. That is, the functions merged, not the people.

    And income tax is going to have to start at a lower level. The higher rate will have to start at a lower level too. Tax reliefs will have to be removed. The song remains the same, even if the singer changes…

  14. So if we use the DoF projection for 2010 of circa -2% over the period 2007 to 2010 the Irish economy will have fallen by about 16%.

    I think that is possibly one the largest contractions of any developed country since the Great Depression.

  15. @yoganmahew.
    Thanks for the reply. It makes it a good bit clearer. I suppose the hard bit is deciding just what needs to be guaranteed.

    I really enjoy this blog and it’s nice to see a focus on solutions. It sometimes seems that the country is in a hole and people are competing with each other to describe how deep it is and how sheer the walls are. Yes we need to know these things but we also need to figure a way out and a way to stop the idiots at the helm to stop digging.

    Economists got it right on NAMA. They were ignored but it shouldn’t stop them communicating a clear message again with strategy/solutions. I’ve a feeling that slowly, but surely, it will start to stick. Otherwise the country will be left with people like Gerry Ryan (nothing against Gerry but he seems to opine like an economics expert at times) shaping public opinion.

    Ireland could very easily end up being a miserable, debt-servicing, youth exporting dump for the next 60 years (it was before) unless some good solutions or best strategies are adopted.

  16. @Eureka – “Ireland could very easily end up being a miserable, debt-servicing, youth exporting dump for the next 60 years ”

    Could?

    🙂

    Sorry, I will try to come up with solutions.

    (Thinks for a bit)

    Sadly I can’t as I don’t have my hands on the levers of power and those that do seem to have a different focus. I will however add a suggestion to my country my call before the deadline (it’s a really good one too).

  17. @Stuart
    “Problem with Jto is he based most of his optimism on exports and these do seem to be recovering (unless you’re going to tell me otherwise). The question is how much that benefits the rest of the economy in reality.”

    It is not rocket science, exports of pharma products like Viagra were always going to rise.

  18. Surely the real message is the continued divergence between GDP and GNP which confirms the difference between FDI-land and the rest of the economy.

    Will somebody please remind everyone that GNP is the only meaningful measure from the perspective of Irish citizens/taxpayers.

  19. @Joseph
    Thats a bit bleak.
    I’m not an economist but I have a family and can’t give up on this country easily.
    I don’t agree that we have to remove those in power before coming up with solutions. The problem is that a collective sense of helplesness is preventing the development of a coherent alternative strategy that people can rally around. Coming up with solutions will help get them out of power.
    Brian Cowen got it wrong with the boom. Brian Cowen got it wrong with NAMA. Brian Cowen got it wrong when he smiled and joked in Europe and the states as even more misery was heaped on his people at home. Brian Cowen sees himself as the only leader able to lead his people into poverty to pay for his mess. And Brian Cowen’s only fallback is that he says others wouldn’t be able to do any better. The muddled cocophony from the opposition only lends credence to this.
    There is a need to develop a well thought out set of alternative strategy so that power can be wrested from those at the helm.
    Brian Cowen’s known for a good joke – I’m not going to let my country be his best one!

  20. @LorcanRK
    “@Yogan, I think that in order to have a double dip we have to have at least one quarter of positive growth somewhere in the cycle. We are still in the first dip.”
    You’re quite right. I missed that 2009Q3 was revised to negative… so we had a brief improvement in the second (third? first?) derivative and now we’re back on the slide.

    Does that sound better?

    (As in more correct…).

  21. Maurice O Leary said on 26 March “Will somebody please remind everyone that GNP is the only meaningful measure from the perspective of Irish citizens/taxpayers.” I would go further than that and challenge conventional economic ideas and suggest that to arrive at a meaningful figure for income ( the earned income and investment income of all the people) the retained profits of corporations should be excluded, as should dividends paid to pension funds . I suggest that retained profit is really more akin to capital accumulation. If such a true figure for total national income was so calculated we would have a better perspective on the following :-
    -tax as % income
    -current Gov spending as % of income
    -the cost of public service salaries/ pensions as % income

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