Economy grew more than 3 times faster than euro average in 2018

CSO says 3% growth in domestic demand better indicator of activity on the ground

Gross domestic product expanded by 6.7 per cent last year, while gross national product grew by 5.3 per cent.  Photograph: iStock

Gross domestic product expanded by 6.7 per cent last year, while gross national product grew by 5.3 per cent. Photograph: iStock

 

The Irish economy grew by 6.7 per cent last year, more than three times the euro zone average.

However, the Central Statistics Office (CSO) cautioned the headline rate of growth – down from 7.8 per cent in 2017 – was still being inflated by the actions of multinationals.

It said measures such as personal consumption and modified domestic demand ,which rose by 3 per cent and 3.3 per cent respectively, were better indicators of underlying domestic activity.

The latest quarterly national accounts show gross domestic product (GDP), the standard measure of economic growth, rose by 6.7 per cent last year, making the Republic the fastest growing economy in the EU for the fifth consecutive year.

Gross national product (GNP), which strips out the multinational profit flows, increased by 5.9 per cent.

In the larger sections of the economy, industry showed a small contraction of 0.2 per cent in volume terms.

ICT growth

In contrast, the information and communication sector, which is dominated by US tech and internet firms, grew by 30.7 per cent.

In sectors driven by domestic activity, construction exhibited the strongest growth, expanding by 15.4 per cent, reflecting the pick-up in housebuilding.

The traditional agriculture, forestry and fishing sector, which is most exposed to Brexit, recorded a 12.9 per cent decrease in output.

Investment, a key metric of underlying business activity, rose by nearly 10 per cent on the back of increased imports of aircraft.

A principal factor in the strong growth last year was the pick-up in exports, which rose by 8.9 per cent.

Imports of goods and services increased by 7 per cent.

The State’s balance of payments results recorded a current account surplus of €29 billion.

The latest figures put the value of the Irish economy at €318 billion in GDP terms. This gave rise to a debt-to-GDP ratio of 68 per cent.

However, debt to modified gross national income (GNI), a more accurate measure of the State’s debt burden, was closer to 100 per cent.