New Release: The Central Bank Quarterly Bulletin 2016

The central bank have just released their 2016 quarterly bulletin. Box A on Page 11 discusses the farce of the 26.5 per cent growth.


“These developments reflect the statistical ‘on-shoring’ of economic activity associated with a level shift in the size of the Irish capital stock arising from corporate restructuring and balancing sheet reclassification in the multinational sector and also growth in aircraft leasing activity”.

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By Aidan Regan

I'm an Assistant Professor at the School of Politics and International Relations, University College Dublin (UCD), and Director of the Dublin European Research Institute (DEI). My research is primarily focused on comparative and international political economy.

2 replies on “New Release: The Central Bank Quarterly Bulletin 2016”

The Central Bank has trimmed its 2016 growth forecast marginally, to 4.9%, which is around the consensus.The economy contracted by 2.1% in the first quarter of this year, leaving the annual growth figure at 2.3%.According to the CSO the economy expanded by 5% in the final three quarters of 2015 so an average figure of 4.9% this year implies very strong growth in the remainder of the year. Given Brexit, this may be a tall order, especially as merchandise exports have weakened a lot in recent months. I expect 2% GDP growth. That said, as we know the exports figures released in the national accounts can be anything so GDP could fall sharply given base effects or rise again, depending on the machinations of the multinational sector.

As for alternative measures of domestic activity, we could use Actual Individual Consumption, as proxied by the sum of personal consumption and government consumption of goods and services Alternatively Domestic demand excluding intangibles

The use of the term ‘on-shoring’ is curious as the link provided in the Bulletin to Seamus Coffey’s blog suggests that it may be months more before there is some clarity on the big adjustments, which produced the mega-revision in the national accounts data.

We know very little about this €300 billion increase…So how do we get a €300 billion increase in the gross capital stock with a little more than €50 billion of investment? This seems hard to explain.

Onshoring from offshore shell companies? Tax inversion companies for whatever reason deciding to have foreign assets located as Irish?

As with Apple’s decision in 2006 to route flows through its Irish companies as stateless, the Irish authorities again appear to be sitting idly by, unaware of the potential blowback that could follow in coming years as new international tax rules are put in place and maybe a new US administration and Congress in 2017 committed to reform the corporate tax system.

There is always a risk that the US could introduce a minimum foreign tax to prevent profit shifting to no tax or low tax havens.

In 2009 IDA Ireland hired a lobbying firm in Washington when Obama proposed corporate tax reforms but the backdrop in 2017 will be different.

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