Distortions to Irish GDP data looked to have played out
This week’s preliminary Irish GDP data for Q2 2024 showed a 1.2% quarter-on-quarter expansion, after a 0.7% gain in Q1. This suggests the measurement distortions related to the multinational sector that led to a 5.5% contraction in Irish GDP in 2023 have now played out. That said, the rebound in H1 may not be sufficient to deliver our forecast for a 1% expansion of Irish GDP in calendar year 2024. A negative GDP growth rate in 2024 is certainly possible. Peering through the statistical fog by looking at a range of indicators, rather than just the volatile GDP data, points to an Irish economy still expanding at a healthy pace. Employee numbers rose by 0.5% in the three months to May, up 2.2% on the year, to a fresh record high of 2.48 million. Similarly, H1 2024 saw robust 9.3% growth in tax revenues, including sharp gains in income taxes (7.5%), VAT (6.2%) and corporation taxes (15.4%).
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