| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy

Finfacts changes from 2015


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Global Cost of Living

Irish Tax - Income/Corporate




Content Management by interactivetools.com.

News : Irish Economy Last Updated: May 29, 2015 - 8:56 AM

ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
By Michael Hennigan, Finfacts founder and editor
May 28, 2015 - 8:49 AM

Email this article
 Printer friendly page

A research note published today by the ESRI (Economic and Social Research Institute) suggests that quarterly national accounts data volatility hinders Irish economic forecasting but the paper avoids referring directly to tax avoidance, which is the main causal factor.

"Irish Quarterly Macroeconomic Data, A Volatility Analysis", by Niall Conroy, a researcher at the ESRI, highlights the difficulties faced by forecasters and policymakers when examining changes in the Quarterly National Accounts

The paper says that the Quarterly National Accounts released by the Central Statistics Office (CSO) provide the most comprehensive estimates of Irish economic activity. However, it highlights the volatility in quarter to quarter changes in GDP and GNP. The measured volatility reflects both the underlying volatility in the Irish economy, "but also the difficulty in measuring economic output in a small open economy."

Commenting on the analysis, Niall Conroy, the author, said “Today’s note shows that the volatility in quarterly GNP and GDP in Ireland is amongst the highest in the OECD. We can also see that the high levels of volatility are evident in several sectors of the economy, particularly those with a strong multi-national corporation presence.”

He continued, "While the rate of volatility in quarterly GNP and GDP has been highlighted previously, we can see that volatility is at its highest at potential turning points in the economy. This highlights the difficulties faced by forecasters and policymakers when examining changes in the Quarterly National Accounts.”

In the research note Conroy says that the volatility in the national accounts is no longer solely due to activities in the manufacturing sector. "It is noticeable however, that the two sectors most responsible for the high levels of
volatility have a significant MNC presence."

Conroy refers to a paper that was produced by John FitzGerald in 2013 on redomiciled PLCs, which shows that both GNP and the Balance of Payments is distorted by these faux-Irish companies.

  • The mainly American so-called tax inversions are motivated by tax avoidance and in the first quarter of 2015 (CSO to publish data next month), there will be the addition of 2 "Irish" companies with combined payrolls of 110,000. Medtronic, the US medical device firm, became Ireland's largest company when it started trading on the New York Stock Exchange in late January following the acquisition of Covidien, another US company that had previously become Irish. On March 17, Actavis plc, the drugs firm and another US company that had become Irish, announced that it had completed the acquisition of Allergan, Inc. in a cash and equity transaction valued at approximately $70.5bn — the CSO may not acknowledge that these transactions distorted the national accounts — US-Ireland Tax Inversions 600,000+ staff
  • Double Irish transactions massively distort services trade while pharmaceutical firms have boosted merchandise exports in recent times by booking overseas production in Ireland. The 2014 trade data is not reliable and in H1 2014 43% of the rise in GDP resulted from these fake transactions, according to the Irish Fiscal Advisory Council — see details here on both fake services and merchandise trade: Irish Export Performance: Myths and reality - Ireland is a poor exporter

Finfacts Sept 2014: The idiot/ eejit's guide to distorted Irish national economic data

Related Articles

© Copyright 2015 by Finfacts.ie

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March