Irish economy grew 1.4% in second quarter

Personal consumption declined following pick-up in used car imports from UK

Paschal Donohoe, Minister for Finance and Public Expenditure & Reform: GDP increased 1.4% in second quarter, but GNP fell 4.6%. Photograph: Brenda Fitzsimons / THE IRISH TIMES

Paschal Donohoe, Minister for Finance and Public Expenditure & Reform: GDP increased 1.4% in second quarter, but GNP fell 4.6%. Photograph: Brenda Fitzsimons / THE IRISH TIMES

 

The Irish economy grew by 1.4 per cent in the second quarter of 2017, rebounding from a 2.6 per cent contraction in the previous quarter.

Despite the volatility from quarter to quarter, the latest national accounts show the Irish economy is growing at a healthy 5.8 per cent in annual terms.

The figures compiled by the Central Statistics Office (CSO) show gross national product (GNP), a better measure of domestic activity in Ireland, however, declined by 4.6 per cent in the second quarter, which was linked to multinational profit flows.

Apart from small contractions in the construction and real estate sectors, all sectors of the economy experienced growth during the quarter.

Financial and insurance activities grew by 4.6 per cent while professional, administration and support service grew by 5.1 per cent.

On the expenditure side, personal consumption of goods and services, a key measure of domestic activity, declined by 1.1 per cent.

CSO statistician Micheal Connolly linked the decline in consumption to the pick-up in used car imports from the UK, triggered by the weakness in sterling.

Investment jumped 39.9 per cent in the quarter driven by the import of intellectual property (IP) products to Ireland, which has been feature of the accounts in recent quarters.

The balance of payments current account, which reflects Ireland’s economic flows with the rest of the word, recorded a deficit of €872 million, an improvement on the €1.65 billion deficit recorded in the second quarter last year.