New CSO GDP/BOP data

The national accounts release is here; the BOP release is here.

  • 2011 real GDP growth is +0.7%
  • But 2011 nominal GDP growth is less at +0.3% (deflation still an issue for GDP deflator)
  • 2011 real GNP shrank by -2.5%
  • Q4 data sees small fall in GDP, larger fall for GNP.
  • Small current account surplus for 2011
  • Cumulative errors and omissions in BOP for 2010-2011 of euro 19.5 billion

50 thoughts on “New CSO GDP/BOP data”

  1. So we’re back in a technical recession, and GNP is contracting at a rate not foreseen – Central Bank forecast minus 0.6% for 2011 in its quarterly report last month and it has turned out, based on these preliminary figures, at -2.5%. GDP was forecast at +0.8% so the 0.7% preliminary outturn is on target with the Central Bank at least. These figures will be deeply disappointing to the Government.

  2. @ Jagdip/Philip

    the GNP at constant market prices, chain linked annually and referenced to 2009 – its at -7.1%?? Whats the significance of that?

  3. So is the ‘export enclave’ (h/t IMF) doing just enough to keep the water from flowing in over the gunwales of the sinking domestic economy? When will the penny drop that this salami-slicing of public expenditure and incremental tax increases without any meaningful, counter-acting structural reform will push the economy down so far that the ‘export enclave’ won’t be able to prevent the water rushing in? Or is it that those on the bridge – and those in the charmed circles that pay court to them – simply don’t care what happens to those in steerage while they are confident they’ll remain above the water-line if or when the ship founders?

  4. Corners turned indeed. more evidence of a two tier economy : the one we mostly live in is shrinking shrinking shrinking, while the enclave FDI is booming.
    And we spent 300m on lawyers yachts to find out there is something fishy about De Berts money management….

  5. Despite years following this site I’m still a complete amateur.
    Doesn’t the GNP figure mean we are fubbard.
    Peripheral bond spreads already rising again – we will be in a programme for another 30 years at this rate? Non?

  6. A quick look around rural towns will show a stark decline in retail outlets before and after xmas. Employment is still falling but apparently a recovery is around the corner with 6% growth.

    Pass the soma please.

  7. @Phillip

    Cumulative errors and omissions in BOP of 19.5bn – this is exactly the ambiguity you referred to in your presentation at the recent CSO seminar Phillip?

  8. When last was GNP current at 123 / 124 Billion ?
    The Charts don’t go back far enough – I find I have to go routing around old CSO stuff to get a handle on this.
    Then of course theres the population rise………..
    GNP per person must be a pretty picture now.

    The ECBs dramatic stage production “The Road to Bangladesh” awaits us all eventually.
    “The Irish actors performance was well praised in numerous reviews – it was found he could Hayek with the best of them”.

  9. @Paul Hunt
    Three years after the housing bubble exploded, there is absolutely no plan to create a viable economy in Ireland. Courting foreign investments with banana-republic corporate taxes creates very few jobs and most of the value-added is the result of nifty transfer-pricing tricks (with probably the exception of pharmaceuticals).The corporate tax rate incentive will probably come under attack by the US and the rest of the EZ this year.
    The common agricultural policy is going to be renegotiated and its cost is certainly going to be lowered in spite of French lobbying, which will be costly for the Irish farmers.
    “Light touch regulation ” in finance is completely discredited and the absence of common-sense regulation now works again Ireland ,not in favor of it.
    Bloated civil service costs are not going down and you keep paying the legal and medical profession more than anybody in Europe does it .Your political class is ,relatively to the GDP, is amongst the most expensive in the world.
    In short ,the structural reforms that were supposed to be the result of the Troika intervention are a joke.
    Your young university graduates are abandoning ship. Who could blame them?

  10. The young university graduates that I teach are going to work for these MNCs rather than abandoning ship. The problem lies elsewhere, where do the builders and shop assistants go?

  11. @Overseas Commentator,

    I find it hard to disagree since you are echoing so much of what I’ve being saying for so long. But, as for corporate tax, the EU and progressive members of the Democratic Party in the US need to think long and hard about the taxation of corporations – in particular that of MNCs with enormous ability to evade/avoid tax and to re-locate activities.

    It doesn’t really matter, because nobody’s listening; and even if they are they’re not paying any attention.

  12. @Overseas Commenter

    Your young university graduates are abandoning ship. Who could blame them?

    Our ship was torpedoed by the ECB and we are still under attack from the likes of Merkel and Rehn so I understand how our frightened youth might want to leave the battle, especially when the dominant strain of thought in our own policy elite is “abject surrender”.

    I expect as soon as we mount a defence things will change, and that time is coming soon.

    Meanwhile the entire EU is starting to enjoy the economic destruction that the austerity consensus has inevitably led to – voodoo economics fails to fix the demand problem again, again. The schadenfreude of the Euro-rightists might be short lived.

  13. An interesting set of figures. Real domestic demand ex changes in stocks grew by 1.3% seasonally adjusted in Q4 or 5.4% SAAR if my take on table 5 is correct.
    Building and constuction expenditure grew q/q for the first time in 17 quarters (well apart from the Q1/Q2 blip.
    The Q3/Q4 rise in employment looks more realistic now.
    So much hyper ventilating on the dual economy and yet the domestic sector is leading the way. Was JtO right all along.? Will Alchemist’s Rocketman be proved right.?

  14. @Tull
    If it was just a question of building stuff to increase GNP quarterly metrics we would not be in this mess.
    Its more a question of building the right stuff for the long term that can provide a cash flow and / or reduce your input costs

    Ireland must come to terms with the fact that the Grot economy does not create wealth , it subtracts from it.

  15. @ Paul Hunt 11:48

    +1 on that

    On PN news of ¢3.1 debt deferment, I think the definition of a pyrrhic victory is appropriate, nothing on the 120% debt/GDP burden, no burden sharing, no fiscal transfer from EFSF to help carry the weight of the banking portion of the above, a ludicrous proposal to defer debt repayments without agreement to restructure debt or writedown.

    A Pyrrhic victory is a victory with such a devastating cost to the victor that it carries the implication that another such victory will ultimately cause defeat.

    There must be great celebrations at ECB level to achieve a virtual endorsement of our failing bailout situation from the Irish contingent in return for virtually nothing.

    Meanwhile the real economy hurries to default:

    Percentage changes on GNP corresponding period of last year,
    2008 ……….-2.8
    2009………..-9.8
    2010………..0.3
    2011…………-2.5

    Could be the only survivors will be the banking sector, the IFSC, the Govt, the rest of the workers left, the real economy left with them…..a compliant media lacking in Daly Shows and Jon Stewarts, a cheer chorus of Ole from cliche driven bondsmen minions filled with hubris as they bow before ECB, masters of a failed bailout that will not work……. count me out of those celebrations, I prefer to keep my critical faculties intact

    Looks like growth is ended here for the foreseeable future. Will we become some debt consumed principality of the euro kept on the leash of debt as prescribed by the Troika and our ‘negotiating’ team ?

    We do need to pay more attention to other economies as to the advantage they can convey to our population as the population emigrates in hope of a better life.

  16. @Shay,

    I see you’re back again – bashing the usual subjects. Engaging with a reasoned critique of your stance is obviously beyond your capability.

    @Tull,

    I, for one, am not hyperventilating. I always agreed with JtO that some sectors of the domestic economy have shown, and are showing, remarkable resilience. And I expect the black economy is booming. Quite a while back some of the CB folks did some research on the extent of the black economy, but, since then, not a peep.

    It’s just that the sheltered sectors are imposing too much excessive and unjustifiable cost on the other sectors.

  17. @Paul Hunt

    It’s just that the sheltered sectors are imposing too much excessive and unjustifiable cost on the other sectors.

    Mere seconds earlier…

    @Shay,

    I see you’re back again – bashing the usual subjects. Engaging with a reasoned critique of your stance is obviously beyond your capability.

    I understand that everyone has their hobby-horses, no one likes the Irish legal professions and some Irish semi-states are not managed for the benefit of the state. These would have been useful issues to focus on any time up to about seven years ago when stopping the bubble and proponents of the various strains of Zombie Economics from putting us in harms way should have become top priorities for any politically and economically aware Irish person.

    However since the onset of the European component of the global financial crisis, and the Mitteleuropean rights decision to use the crisis as stick to beat the rest of Europe with, the drag from the sheltered sections of the Irish economy (apart from our TDs) is not the a significant danger to the economy or general well being of the nation. The power and interests of the ECB and its stakeholders and the dominance of Merkelism are.

    Right now we have other problems and bigger enemies without than within. The enemies without are not just a threat to us – austerity and neoliberalism pose a threat to the EU’s status as a civilized and progressive enterprise.

  18. By God you are a cheerful lot !!

    The main problem in the national economy (GNP) is lack of credit with really only one bank operating here. We have Banks like National Irish that dont take cash lodgements – what a joke. Ulster selling it’s loan book and assorted others in sleep zombie mode. Then we have a CB so bound up in red tape that nothing happens/moves without their say so. More useless penpushing Public Servants screwing Businesss and the Public on ridiculous salaries and perks. The Guard just changes from one pampered group to another.

    There is an opportunity for a new Bank here that wants to do business and does not have the mindset of the zombies. Will it happen – probably !!!

  19. @Jagdip

    “These figures will be deeply disappointing to the Government.”

    Not by the time pr.gov get hold of them they won’t. Anyway, don’t worry. Our economy is due to take off like a rocket any time soon.

    @Overseas commentator

    “Your young university graduates are abandoning ship”

    Funny you should mention that but the guy who is telling us the economy is about to take off like a rocket is also telling us that the young people leaving our shores are simply making ‘lifestyle choices.’

    I love the phrase ‘technical recession.’ I note from my bank statement this morning that I am ‘technically overdrawn’ and judging from what I see in the windows of estate agents locally, I am ‘technically in negative equity.’
    I have subsequently tried to persuade Mrs PR Guy that we are only ‘technically married’ ….but she isn’t having any of it.

  20. @Shay,

    I won’t detain you, since, like Don Quixote, it appears you are about to mount your trusty steed and to charge in to battle on the mainland raining blows on the evil ogres of the centre-right. There’s nothing I can do or say, since you are wearing the blinkers, and not the horse, expect wish you ‘good luck in Europe’.

  21. @PR Guy

    Our economy is due to take off like a rocket any time soon.

    Whether the Irish economy resembles the wasteful and inaccurate neoliberalism guided V1 or the improved but ultimately worthless ordoliberalism guided V2 the end result will be the same.

    The consumption of all fuel and a crash.

    With apologies to Tom Lehrer….

  22. At best, the Irish economy will remain stagnant for the foreseeable future.

    Remembering that the ultimate goal of economics is to facilitate trade, a quicker way to full employment and healthy business levels would be to introduce a second source of digital money to complement or replace the first.

  23. @ Shay Begorrah

    Our ship was torpedoed by the ECB and we are still under attack from the likes of Merkel and Rehn..

    Blame everyone but ourselves.

    Why bother changing?; why bother with reform?; why should there be surprise at the slow motion response to the crisis?

    Why would we see the need to learn from the crisis?

    We expect responsibility and accountability from others but why expect that at home?

    And after almost 15 years of a planning corruption tribunal, the underlying rezoning system that spawned the corruption remains unreformed; lawyers have become multimillionaires working as public contractors and former groupies are shocked at the revelations.

    Déjà vu all over again and again…

  24. It’ll be like this for the rest of our lives. This is our new normal.
    People keep assuming that prosperity is a natural entropic state to which we are destined to return. Prosperity has to be worked at.
    There’s not much we can do about this stuff at this point. We need to look at the next challenge – energy production. And start innovating.

  25. @ Dork of Cork

    As you just like throwing insults maybe you should take yourself off to the US Republican Primaries where you would be in great demand. For the record I run a SME which is probably more than you ever did in your insular life.

  26. @TRP
    Thats true – I am a useless Dork with a Sloth like attitude sometimes – never denied that fact.
    But you clearly don’t share my Perrin sense of humour.
    Theres little point in creating stuff if you extract more capital from systems then what you put in.
    You can’t escape the input output equation no matter how dynamic you are.
    The Sloth has survived for millions of years by only coming down to the bottom of the tree to relieve himself once a week.

    http://www.youtube.com/watch?v=Pqio2G_Ra6g

    Try to read some of Rodney Shakespeare stuff (Binary Economics) – he talks about the superioty of capital over Labour in terms of sheer power since the beginning of the Industrial revelution.
    If this capital force is somehow malinvested it makes subsequent Labour efforts (with little capital remaining) to correct this almost impossible to counter

  27. @Michael Hennigan

    @ Shay Begorrah

    Our ship was torpedoed by the ECB and we are still under attack from the likes of Merkel and Rehn..

    Blame everyone but ourselves.

    Ourselves, paleface?

    As a left voting, privately employed – formerly self employed, non property owner working outside of the banking, construction or media sectors who always believed Hayek was a deranged market mystic and that the EU had strong anti-democratic tendencies help me out by explaining exactly why I, or my cohort, should be accepting any blame for this disaster?

  28. Who is more ‘suprized’? Us here? The Meeja? Or the Smurfs?

    Its a tad early to confirm that the Irish economy is actually regressing back to some previous time, but it sure looks promising.

    Make friends with folk who know how to grow food, and work Tilly lamps. 😎

  29. @ Shay
    The points made are fair but it’s the inability to tolerate any other point of view that’s just tiresome.
    Some people are just like that.
    In a world where millions die because of lies about weapons of mass destruction etc. Michael chooses to focus on planning in Ireland. The world sucks Michael – not just us.

  30. @TRP
    That’s right, we’ll make ourselves rich by borrowing money… it worked so well in the past…

    How is it possible to liquidate 19 bn in direct investment in a quarter if that is really investment? Is this the movement of, for example, the BoSI loan book abroad?

  31. @TullMcadoo
    “An interesting set of figures. Real domestic demand ex changes in stocks grew by 1.3% seasonally adjusted in Q4 or 5.4% SAAR if my take on table 5 is correct.
    Building and constuction expenditure grew q/q for the first time in 17 quarters (well apart from the Q1/Q2 blip.”

    Could you elaborate a little more please . I can only see negatives mostly, even in Table 5 that you refer to?
    I can see that building grew on a Qtr/Qtr basis by 2.4%.
    Building now 2.2% of economy against a developed country norm of ~6% to 8%.

    If building and construction recovered to a low level of 4.4%, doubling its current output, the approx jobs increase would be much greater than 2% of total employment, or an increase of at least 36,000 possibly closer to 50,000.

    A long term policy to achieve this is of course taking its place in a long queue of ‘more important’ objectives, such as paying the pensions of corrupt ex politicians among other things.

    For all the talk, there is no long term macro economic plan. Just a fix the banks, and keep borrowing to pay the PS and welfare.

  32. JR
    my mistake table 6- expenditure in constant prices seasonally adjusted-C+G+I grew 1.3% in real terms q/q whereas GDP fell by 0.2% q/q and GDP fell by 2.2% q/q in real terms.
    The decline in stocks and net exports knocked over 1% off GDP.
    I am not an expert on national a/cs but it looks to me for this quarter that the domestiic economy showed some real growth while the external sector was weaker. It also explains why we got a positive employment surprise in Q4.
    Maybe somebody more qualified will comment.

    I agree with your comment ob B&C. I also agree with the thrust of what you are saying re the PS. We have got our priorities wrong in cutting the PCP rather than current spending. Taking the Bert’s pension would probably pay for 2-3 construction workers to build a school somewhere. Taking the lump sum off a retiring hospital consultant or SG of a department would build 2-3 schools or fund a bit of road repair. All about choices.

  33. @Hoganmahew

    You dont even understand the reason why there is a need for credit. Unless we want to go back to the dark ages there has to be an expansion of credit first for business and then for personal needs. At present there is not one lender that will deal with low ticket loans without handing over your wife as security for simple necessities like technology. Whole swathes of business have not upgraded their technology for nearly 4 years because they are shunned by so called Banks. Keep this up this and Irish business will be so far behind their counterparts in other countries that Ireland will be considered a sick joke. This is just one area of many productive areas of investment that is not capable of being financed at present.

  34. @TRP
    Why can’t we just increase the money supply rather then the credit supply?

    Bank Credit is the process of taking resourses from the future – we are clearly all credited out.
    We need much lower leverage ratios – but that does not mean you collapse the money supply.

  35. @Eureka

    @ Shay
    The points made are fair but it’s the inability to tolerate any other point of view that’s just tiresome.

    Wait, that could be me!

  36. @ TRP

    Your frustration is perfectly understandable, and very common these days. The banks are desperately trying to build capital, so they are not lending. As everyone knows, they bust themselves with property loans. SMEs are now paying the price. Take a walk down the main street of any provincial town. Even the local bank branches will soon be putting up the shutters.

    I don’t think you will see eye to eye with Dork around what constitutes productive investment. He is just as pissed off as you are, probably more so, but he’s definitely not insular. A bit cranky on occasion maybe, but that’s a result of all those sleepless nights.

  37. Tull
    “Taking the lump sum off a retiring hospital consultant or SG of a department would build 2-3 schools or fund a bit of road repair.”
    No, it would fill the gap nicely in the yacht fund of SC’s now bereft of the milch cow of Mahon. Because…these are contractual rights, on which the constitution has things to say. Just, y’know, saying. Plus, i doubt they would go anywhere near the issues you suggest. Schools come in at about 10m a pop, roads about im per KM. That much they do not get.
    Less of the polemical PS bashing and more cool argument would serve us well.
    We can take the Bert if he is shown to have fraudulently obtained benefits in office. Ill hold yer coat.

  38. @ TRP

    That sounds like a battle cry for the return of the good old days.

    As a small business owner, if you are making a profit, you are among a minority.
    Businesses were being run up and down the country based on excess credit. Profit became unimportant.
    So who were the beneficiaries of this profitless economy?
    Mainly landlords., and of curse all the people employed in the small businesses.
    If the banks continue to refuse credit to your competitors some will go and you can put your prices up and make a profit.
    Making a profit? now there’s an idea!
    Then using that profit to pay down debt so that you have to pay less in interest to banks.
    When the politicians came out saying that businesses were starved of credit they were just being politicians.
    They know that excess credit in the economy in public, corporate and private sectors was part of the problem.

    If you are waiting for the government to give out a new banking license to compete with their zombies in resuscitation units, I wouldn’t hold my breath.

  39. @ Gerard Reilly

    “No, it would fill the gap nicely in the yacht fund of SC’s now bereft of the milch cow of Mahon. Because…these are contractual rights, on which the constitution has things to say. Just, y’know, saying”

    The government could easily take some or most of the lump sum payments from retiring civil servants by applying tax to them – without impinging on anybody’s contractual rights.

    All of yesterday’s talk about corruption in planning doesn’t hold a candle to the endemic whiff of corruption coming from a civil servant that egregiously pays itself a whopping great retirement bonus and then has the balls to declare it to be tax free!

  40. Edward
    That is great idea, the IMF made one of the Accession states apply a 95% windfall tax on some redundancy payments. 95% is perhaps a bit steep. How about 75%?

    Talk to the Waterford Glass scheme members about contractual rights. If you are going to haircut bondholders, you will have to restructure other govt obligations.

  41. Of course, a) there is already tax on lump sums and pension pots over x, where x is a number I can’t recall , b) by all means lets tax them more (but that nasty wee issue of the upper middle classes being class solid regardless of public/private state will result in it dying a desth) , and c) sigh, wearily one recalls most public servants earn <40k
    CRUCIFY THEM …

  42. @Eamonn

    I am making no battle cries for the return of the good old days. I am simply pointing out that productive investment cannot be financed at present because of the Zombie Government Banks and Foreign equiivalents. If you want to see Ireland become a desolate wasteland then the surest way to arrive there is to not invest in your business be it technology,equipment,premises, vehicles and people. Sorry Not every SME is in loss situation otherwise two thirds of people employed in the State would be out of work but all have to balance cashflows. One of the ways of doing this is by borrowing medium to long term to finance various types of assets to keep profitable. Those that do not invest in their businesses will inevitably become unprofitable. It is also important to invest considerable resources in training and educating people to remain profitable. The Ostritch approach does not work in business if you want to survive and prosper.

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