Q4 National Accounts/Preliminary 2012 Results

The CSO have published the Q4 2012 Quarterly National Accounts and Balance of Payments both of which contain preliminary full-year results for 2012.

In Q4, it is estimated that real GDP was flat (though is recorded as –0.0% and it can seen that the reported decline is –0.047%), while real GNP fell 0.8% in the quarter.  The first estimates of the Q3 changes published in December have both been revised down, from +0.2% to –0.4% for GDP and from –0.4% to –0.8% for GNP.  Two GDP contractions in a row mean that Ireland once again satisfies the technical definition for a recession – for the first time since Q4 2009 (though only because of the very small decline in Q4 which is subject to revision).

The preliminary estimate is that annual real GDP growth in 2012 was 0.9%.  Real GNP was 3.4% higher in 2012.

For debt contracts, the level of 2012 nominal GDP is estimated to be €163.6 billion.  Nominal GDP is estimated to have grown 2.9% in the year.  Nominal GNP is put at €133.4 billion, up 5.0% on 2011.

In real terms, Personal Consumption Expenditure fell 1.6% in the year, Investment rose 1.2% and there was an 3.7% annual fall in the measure of Government Expenditure included in the accounts.

The measure of real Final Domestic Demand fell 1.2%, the fifth consecutive annual decline.  This measure is sometimes used to reflect the performance of the “domestic” (i.e. non-MNC) economy but it includes the Investment of MNCs which is volatile due to the purchases of aircraft by aviation leasing firms based in Ireland.  By definition, Final Domestic Demand omits the export performance of indigenous Irish firms.

Exports in 2012 were 2.9% higher than in 2011. Goods exports were down 2.8% while service exports rose 7.9%.  Imports were 0.3% up in 2012.  Goods imports were down 2.7% with service imports up 2.0%.

Exports are 108% of GDP; imports are 84% of GDP.  Although not in these figures we know that around 90% of exports are created in the MNC sector, with the top 10 companies accounting for one-third of the total.

In the Balance of Payments the estimated current account surplus for 2012 is 4.9% of GDP up from a 1.1% of GDP surplus in 2011.

Ireland continues to be a massive importer of intellectual property with Royalties/Licenses contributing €32.0 billion to service imports (€29.2 billion in 2011).  On the other side €36.5 billion of Computer Services exports were recorded, a 14.7% increase on €31.8 billion of such exports recorded in 2011.  The balance of services improved from -€1.8 billion in 2011 to +€2.9 billion in 2012.  This has driven the increase in GDP.

GNP is up by more because net factor outflows improved from –€31.7 billion in 2011 to -€28.9 billion in 2012.  The driver of this change was an increase in the inflows of factor incomes from €55.9 billion to €58.1 billion.  Outflows of income went from €87.7 billion to €88.2 billion.  The residency of companies may be a factor in explaining the rise in income inflows.

Separately, Eurostat has released regional GDP figures (albeit for 2010).  Per capita GDP in the Border, Midlands and Western region was 85% of the EU average.  For the Southern and Eastern region per capita GDP was 145% of the EU average.

4 replies on “Q4 National Accounts/Preliminary 2012 Results”

Thanks for the excellent summary Seamus.

Overall I would say this is not a bad outcome given the 3.7% contraction in government spending, the ‘patent cliff’, and the fiscal tightening in budget 2012. It probably places Ireland in the top tier of Eurozone nations for 2012 GDP growth.

This time last year the predictions for 2012 nominal GDP were generally of the order of €159-161 billion. This reflected the predicted figure for 2011 of around €156 billion. The 2011 figure was revised upwards well into 2012 to €158.9 billion. (I can’t place the exact timing of it.) So, compared to this time last year, the nominal GDP figure has moved from “€156 billion” to €163.5 billion year-on-year. The actual nominal increase from 2011/2012, from €158.9 billion to €163.5 billion, is a good 2.9%. This gives hope for near-future year-on-years of 3.9% or 4.9%, figures that could contribute to taking the sting out of high borrowings.

I wonder if the Southern and Eastern region will be able to maintain that margin over EU average as the crisis goes on and on and on .

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