The Irish Central Bank has today released its Quarterly Bulletin on the Irish Economy. Below is a reproduction of the forecasted GDP growth table from this publication. What we can see is that Gross Domestic Product (GDP) is forecast to growth by 0.7% and 1.9% in 2012 and 2013. The forecast for 2012 is actually an upward revision of the Central Bank’s previous growth forecast of 0.5%. This upward revision reflects a better than expected domestic economic position. While the domestic position may be better than previously thought this does not mean that we have returned to an ideal situation. We can see that all aspects of the domestic economy (with the exception of gross fixed capital formation from machinery and equipment) is still declining. This contraction of the domestic economy has been occurring since the onset of the 2007 recession, with domestic personal consumption, public consumption and gross fixed capital formation. Exports remain the driving force of the Irish economy, increasing year on year. Without this growth in exports the Irish economy would still be contracting.
The rise in GDP is also a reflection of the extent of foreign direct investment in the Irish economy. GNP essentially removes the profits of foreign companies operating in Ireland and includes the profits of Irish businesses operating elsewhere. This perhaps gives a more accurate reflection of the performance of the Irish economy. What we can see is that this is forecasted to continue to decline in 2012 (at a rate of -0.3%) but will return to growth in 2013 (at a rate of 0.9%).
Overall, while the Irish economy is forecasted to continue to grow in 2012 and 2013 this is forecasted mainly as a result of Ireland’s continued export growth and does not reflect growth in the domestic elements of GDP.
Overall, while the Irish economy is forecasted to continue to grow in 2012 and 2013 this is forecasted mainly as a result of Ireland’s continued export growth and does not reflect growth in the domestic elements of GDP.
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