The quarterly changes will attract plenty of attention but little can be judged from them given the volatility of the series, the possibility of revisions and the impact of the MNC and IFSC sectors.
Quarterly Changes: GDP +1.5%; GNP +0.6%
More significantly perhaps are the year-on-year changes for the first six months of the year.
- Real GDP (2012 prices)
- H1 2013: €85,163m
- H1 2014: €90,069m
That is an annual increase of 5.8%. For GNP the equivalent change is +6.0%. Wow!
Value added increased in all sectors when compared with H1 2013: (% = real annual growth, € = amount in 2012 prices)
- Agriculture, Forestry and Fisheries: +11.9% to €2.45bn
- Industry: +0.7% to €22.52bn
- with Building and Construction: +8.3% to €1.51bn
- Distribution, Transport, Communications and Software: +10.9% to €20.35bn
- Public Administration and Defence: +3.7% to €3.22bn
- Other Services (including implied rent): +3.3% to €33.90bn
- Taxes on goods/services less subsidies: +9.8% to €8.31bn
For fiscal rules junkies, nominal GDP for H1 2014 is €90.2 billion. Last April’s Stability Programme Update had a forecast of nominal GDP in 2014 of €168.4 billion. The methodological revisions completed by the CSO over the summer and the recent growth mean that a nominal GDP of around €180 billion is now likely this year. Sticking with the Department’s 3.6% nominal growth projection for next year gives a 2015 figure of €186.5 billion. These increases in the denominator will significantly improve the appearance of fiscal ratios.
Although net exports increased and contributed around 40% of the increase in GDP the remainder is due to domestic demand. Real total domestic demand in H1 2014 is 4.0% up on the equivalent period in 2013. Although all components are up (consumption +1.2%, government expenditure +5.2%) much of the increase is driven by investment which is up 11.3% year-on-year. In recent years much of the volatility in this component has been the result of aircraft purchases by leasing companies based in Ireland.
The current account of the Balance of Payments shows a surplus of 4.3% of GDP for H1 2014 compared to one of 2.5% of GDP for H1 2013.