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GNI*, a key deglobalized measure of Ireland’s economic performance, expanded by 5.0% in 2023.
Personal spending on goods and services, a key measure of domestic economic activity, increased by 4.8% in the year.
Modified Domestic Demand (MDD), a broad measure of underlying domestic activity that covers personal, government and investment spending, rose by 2.6% in 2023.
Multinational-dominated sectors contracted by 16.2% in 2023 with all other sectors increasing by 6.1%.
Exports shrank by 5.8% in 2023 driven by a decline in Goods Exports of 13.8% while imports grew by 1.2%.
In the Balance of Payments results, a Current Account surplus of €41.3 billion was recorded in 2023 while the modified Current Account balance (CA*) – which excludes globalisation effects – recorded a surplus of €9.5 billion, or 1.9% of GDP.
For Quarter 1 2024, the updated estimate for GDP indicates an increase of 0.7%, with Modified Domestic Demand rising by 1.0%.
| Kieran Culhane | (+353) 1 498 4364 |
|---|---|
| John Sheridan | (+353) 1 498 4258 |
| nat_acc@cso.ie | |
| bop@cso.ie |
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Statistician's Comment
The Central Statistics Office (CSO) has today (12 July 2024) published updated Quarterly National Accounts and International Accounts results for Quarter 1, 2024 and Annual National Accounts (ANA) results for the year 2023. Today’s results include revisions routinely incorporated at this time as more comprehensive and detailed data are available, but also Benchmark Revisions that take place once every five years in the Macroeconomic results across all EU Member States.
Assistant Director General with responsibility for Economic Statistics, Christopher Sibley, commented:
“In the Annual National Accounts results, Gross Domestic Product (GDP) has contracted by 5.5% in 2023, driven largely by a 13.8% fall in Exports of Goods. Gross National Product (GNP) – a measure of economic activity that excludes the profits of multinationals – grew by 5.5% in the year. Decreased multinational profit outflows in 2023 compared with 2022 caused the divergence between GDP and GNP in the year.
Growth in the globalised Industry sector contracted by 21.7% in 2023 compared with 2022 while the Information & Communication sector increased by 7.4% in the year. Overall, the multinational dominated sector contraction was 16.2%, the first contraction since 2013, and in 2023, these sectors accounted for 46.6% of total value added in the economy, compared with a 52.5% share in 2022.
There was an increase of 6.1% overall for sectors focused on the domestic market in 2023 although the picture was mixed with the Agriculture, Forestry & Fisheries sector growing by 14.8% in the year, the Financial & Insurance sector expanding by 14.1%, and Real Estate Activities increasing by 10.9%. However, the Construction sector fell by 2.9% in 2023 while the Distribution, Transport, Hotels & Restaurants sector posted a decline of 1.0% in the year.
Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) increased by 4.8% in 2023. Government spending on goods and services increased by 4.3% in the year. Examining PCE constant price levels over the past four years, personal spending reached €141.3 billion in 2023, exceeding the €123.6 billion pre-pandemic peak level of spending in 2019 by 14.3%. PCE accounted for 28.7% of GDP in 2023, a higher percentage compared with years 2020 to 2022 but lower than the 32.1% result posted in 2019.”
Commenting on the impact of globalisation and the indicators of underlying domestic activity, Chris Sibley said:
“Today’s results include estimates for GNI*, the indicator designed to exclude globalisation effects disproportionately impacting Irish economic results. In constant prices, GNI* expanded by 5.0% in 2023. Today’s results show the transition in current prices from a GDP level of €510.0 billion in 2023 to a GNI* level of €290.9 billion. The fall in GDP in 2023 followed strong growth of 9.4% in 2022 and 13.6% in 2021. Ireland's GDP exceeded €0.5 trillion for the second year in a row in 2023.
Net National Income (NNI), an important internationally comparable indicator of underlying or de-globalised activity from the National Accounts framework that closely mirrors the GNI* series, stood at €260.1 billion in current prices in 2023. Between 2022 and 2023, NNI at constant prices rose by 7.0%.
Modified Domestic Demand (MDD) – a modified measure of personal, government and investment spending – increased by 2.6% in real terms in 2023. MDD is an important measure of underlying demand and excludes the globalisation effects of trade in intellectual property products and trade in aircraft by leasing companies from the standard Final Domestic Demand measure.
In International Accounts results, the Current Account of the Balance of Payments recorded a surplus of €41.3 billion in flows with the rest of the world in 2023, a disimprovement of €4.4 billion compared with the surplus of €45.6 billion in 2022. This was driven to a significant degree by lower Goods for Processing Exports offset by lower net outflows of multinational profits. The improvement of €2.0 billion in the Services balance between 2022 and 2023 reflects increased Computer Services Exports that were greater than the combined increases in royalty and Business Services imports in the year. In comparison, the modified Current Account balance, or CA*, which excludes the impact of re-domiciled companies, aircraft leasing companies and intellectual property products, recorded a surplus of €9.5 billion in the year. Multinational profit net outflows were €108.4 billion in the year, a fall of €36.0 billion on 2022 levels.”
On the revised Quarter 1 2024 results, National Accounts Statistician Gordon Cavanagh further commented:
“Updated results for Quarter 1 2024 show GDP expanded by 0.7% compared with Quarter 4 2023. Factor income outflows were €7.7 billion higher than in the previous quarter, leading to an overall decline in GNP of 7.0% when compared with the previous quarter.
The multinational dominated sectors of the economy contracted by 5.5% overall in Quarter 1 2024. The Industry sector recorded a significant decrease over the same period compared with the previous quarter, falling by 5.7%, more than offsetting the growth in the Information & Communication sector of 1.2%. Sectors focused on the domestic market experienced mixed results in the quarter. The domestically facing Distribution, Transport, Hotels & Restaurants sector increased by 3.1% quarter-on-quarter while the Arts & Entertainment sector expanded by 2.9%. Professional & Administrative services increased by 2.7% in Quarter 1 2024 while Finance & Insurance grew by 1.0%. The Agriculture, Forestry & Fishing sector recorded a decline of 2.6% in the quarter while Real Estate activities fell by 2.0% and Construction dropped 1.1%.
Looking at expenditure in the economy, Investment in capital formation decreased by 39.7% in the quarter explained by a fall in investment in intangible assets when compared with Quarter 4 2023. Personal spending (PCE) increased by 0.3% in the quarter, while Modified Domestic Demand rose by 1.0%.”