Ireland GDP rises 11% to €115bn in first quarter

The multinational-dominated sectors of Ireland’s economy helped drive gross domestic product (GDP) up 10.8% to €115.5 billion in the first quarter of 2022, according to quarterly national accounts published by the Central Statistics Office (CSO).

Multinational dominated sectors grew 14.1% in the quarter while sectors focused on the domestic market increased 7.6%.

Ireland’s balance of payments current account for the quarter recorded a surplus of €17.4 billion in transactions with the rest of the world.

The CSO said Modified Domestic Demand, a “broad measure of underlying domestic activity that covers personal, government and investment spending,” decreased by 1% in the first quarter.

Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, said: “Growth continued in the more globalised sectors of the economy in Q1 2022 with Industry increasing by 15.0% and the Information & Communication sector growing by 4.3%.

“Overall, multinational dominated sectors grew by 14.1% in the quarter.

“Sectors focused on the domestic market grew by 7.6% in Q1 2022, driven by an increase of 11.9% in Distribution, Transport, Hotels & Restaurants.

“Construction contracted by 3.7% in the quarter.

“Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) decreased by 0.7% in Q1 2022.

“Investment in capital formation decreased by 39.5% in the quarter explained by a fall in investment in intellectual property products (IPP) when compared to Q4 2021.

“Modified Domestic Demand (MDD), a broad measure of underlying domestic demand that excludes IPP and aircraft related globalisation effects, decreased by 1.0% in Q1 2022.

“Overall, Gross Domestic Product (GDP) is estimated to have grown by 10.8% in Q1 2022, driven significantly by an increase of 5.2% in Exports of Goods & Services.

“Net factor income outflows of €34.7 billion – which includes multinational profits – were recorded in Q1 2022, the highest to date.

“Consequently, Gross National Product (GNP), a measure of the economy that reflects the impact of factor incomes flows, decreased by 0.4% in the quarter.”

On transactions with the rest of the world, Banim said: “In International Accounts results, the Current Account of the Balance of Payments recorded a surplus of €17.4 billion in flows with the rest of the world in Q1 2022 compared to a surplus of €19.0 billion in Q1 2021.

“Improvements of €4.1 billion and €0.6 billion in the merchandise and services surpluses respectively year-on-year were offset by an increase of €7.3 billion in net outflows of multinational profits.

“Today’s International Accounts publication includes a table of Current Account transactions with the UK.

“The results show a surplus of €2.8 billion for Trade in Goods & Services with the UK in Q1 2022 compared with a surplus of €4.9 billion in Q1 2021.

“Net income outflows of €3.2 billion were recorded in the quarter compared with outflows of €1.5 billion in the same quarter of 2021.

“Overall, the Current Account deficit with the UK was €367 million in Q1 2022, a disimprovement of €3.8 billion from the surplus of €3.4 billion recorded in Q1 2021.”

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