Irish Economy: The CSO said today that preliminary estimates for the third quarter of 2014 indicate that GDP (gross domestic product) remained practically unchanged in volume terms on a seasonally adjusted basis compared with the second quarter of 2014 while GNP increased by 0.5% over the same period.
Factor income outflows were €636m higher in Q3 2014 compared with Q3 2013 resulting in the 3.5% increase in GDP becoming a 2.5% increase in GNP over the same period.
Comparisons with Q3 2013: On the output side of the accounts gross value added in Agriculture, forestry and fishing fell by 1.6% while Distribution, transport, software and communication rose by 6.4% in Q3 2014 compared with the same quarter of 2013. Industry (including Building and construction) increased by 2% over this period, while Other services increased by 3.7% in Q3 2014.
On the expenditure side, Capital investment rose by 7.8%. Government expenditure decreased by 1.4% while Personal expenditure remained unchanged compared to Q2 2013. Net exports were €1,536m higher in the third quarter of 2014 compared with the corresponding quarter of 2013.
The Balance of Payments current account surplus in the third quarter of 2014 was €3,847m – an increase from the €2,687m surplus in the third quarter of 2013. A surplus of €12,359m on merchandise was offset by a deficit of €8,511m on invisibles in the quarter.
Compared with the third quarter of 2013, merchandise exports at €27.32bnwere up €4.15bn while merchandise imports at €14.96bn- up €1.37bn.
Services exports at €25.75 were up €3.04bn mainly due to increased business services and computer services exports. Service imports increased by €4.40bn to €26,59bn driven by increases in royalties/licences payments.
Analysis: Irish Economy: Flat growth in Q3 maybe noise?; "Spectacular" recovery continues says Ibec
A jump in goods exports in recent times mainly reflects manufacturing overseas not activity in Ireland.
Which is better GDP or GNP?
Tax avoidance-related 'contract manufacturing' overseas (e.g Dell booking the output of its Polish plant in Ireland) and Double Dutch Irish Sandwich schemes which provide virtual services exports of about €45bn, impacts both GDP and GNP while tax inversion companies distort both GNP and the Balance of Payments.
In 2013 a Balance of Payments surplus would have been a deficit but for the tax inversions - legally they are Irish but they may have a few employees at an Irish headquarters or no employees.
Financial Times: Tax deals raise questions over Ireland’s growth spurt
43% of rise in H1 2014 GDP from manufacturing overseas - Irish Fiscal Council
The idiot/ eejit's guide to distorted Irish national economic data
US-Ireland Tax Inversions 600,000+ staff: Kenny, Noonan met with top US corporate lawyers