GNI*, a key deglobalized measure of Ireland’s economic performance, expanded by 6.7% in 2022.
Personal spending on goods and services, a key measure of domestic economic activity, increased by 9.4% in the year, reflecting a continued recovery following the ending of COVID-19-related restrictions on household spending in 2020 and 2021.
Modified Domestic Demand, a broad measure of underlying domestic activity that covers personal, government and investment spending, rose by 9.5% in 2022.
Multinational-dominated sectors grew by 15.6% in 2022 with all other sectors increasing by 5.6%.
Exports grew by 13.9% in 2022 while higher goods and royalty imports drove growth of 15.9% in overall imports.
In the Balance of Payments results, a Current Account surplus of €54.6 billion was recorded in 2022 while the modified Current Account balance (CA*) - which excludes globalisation effects - recorded a surplus of €19.5 billion.
For Quarter 1 2023, the updated estimate for GDP indicates a contraction of 2.8%.
| Christopher Sibley | (+353) 1 498 4305 |
|---|---|
| John Sheridan | (+353) 1 498 4258 |
| nat_acc@cso.ie | |
| internationalaccounts@cso.ie |
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Statistician's Comment
The Central Statistics Office (CSO) has today (14 July 2023) published updated Quarterly National Accounts and International Accounts results for Quarter 1, 2023 and Annual National Accounts (ANA) results for the year 2022.Today’s results include revisions routinely incorporated at this time as more comprehensive and detailed data are available.
Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, commented:
“In the Annual National Accounts results, Gross Domestic Product (GDP) is estimated to have grown by 9.4% in 2022, driven by a 13.9% increase in Exports of Goods and Services. Gross National Product (GNP) - a measure of economic activity that excludes the profits of multi-nationals - grew by 3.9% in the year. Increased multi-national profit outflows of €28.4 billion in 2022 compared with 2021 caused the divergence between GDP and GNP in the year.
The ending of COVID-19 related restrictions led to higher levels of economic activity in 2022 for many of the sectors focused on the domestic market. The Distribution, Transport, Hotels & Restaurants sector increased by 16.9% in the year, with Agriculture, Forestry & Fisheries up by 6.3%, while Construction and Real Estate activities both posted growth of 4.2% . However, the Finance & Insurance sector contracted by 7.8%.
Growth in the globalised Industry (excl. Construction) sector expanded by 18.7% in 2022 compared with 2021 while the Information & Communication sector increased by 7.1% in the year. Overall, the multinational dominated sector growth was 15.6% and in 2022, these sectors accounted for 54.2% of total value added in the economy, compared with a 51.9% share in 2021.
Expenditure in the Economy
Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) rose by 9.4% in 2022, reflecting the ending of COVID-19 related restrictions on consumer spending. Government spending on goods and services increased by 3.5% in the year. Examining PCE constant price levels over the past three years, personal spending reached €124.8 billion in 2022, exceeding the €116.8 billion pre-pandemic peak level of spending in 2019 by 6.8%. PCE accounted for 26.3% of GDP in 2022, unchanged compared with 2021 but down from 27.9% of GDP in 2020 and 33.0% in 2019.”
Impact of Globalisation and the Indicators of Underlying Domestic Activity
Commenting on the impact of globalisation and the indicators of underlying domestic activity, Ms. Banim said:
“Today’s results include estimates for GNI*, the indicator designed to exclude globalisation effects disproportionately impacting Irish economic results. In constant prices, GNI* expanded by 6.7% in 2022. Today’s results show the transition in current prices from a GDP level of €506.3 billion in 2022 to a GNI* level of €273.1 billion.They also tell us that Ireland’s GDP exceeded €0.5 trillion for the first time in 2022.
Net National Income (NNI), an important internationally comparable indicator of underlying or de-globalised activity from the National Accounts framework that closely mirrors the GNI* series, stood at €241.7 billion in current prices in 2022. Between 2021 and 2022, NNI at constant prices rose by 4.2%.
Modified Domestic Demand (MDD) – a modified measure of personal, government and investment spending – increased by 17.5% at current prices and 9.5% in real terms in 2022. MDD is an important measure of underlying demand and excludes the globalisation effects of trade in intellectual property products (IPP) and trade in aircraft by leasing companies from the standard Final Domestic Demand measure.
International Accounts
In International Accounts results, the Current Account of the Balance of Payments recorded a surplus of €54.6 billion in flows with the rest of the world in 2022, a disimprovement of €4.9 billion compared with the surplus of €59.5 billion in 2021.This was driven to a significant degree by higher royalty imports and net outflows of multinational profits. The disimprovement of €5.7 billion in the Services balance between 2021 and 2022 reflects increased royalty imports in 2022 that overtook the increase in computer services exports in the year. In comparison, the modified Current Account balance, or CA*, which excludes the impact of re-domiciled companies, aircraft leasing companies and IPP, recorded a surplus of €19.5 billion in the year. Multinational profit net outflows were €125.4 billion in the year, an increase of €32.1 billion on 2021 levels.”
Revised Q1 2023 results
On the revised Quarter 1 2023 results, National Accounts Statistician Gordon Cavanagh further commented:
“Updated results for Quarter 1 2023 show GDP contracted by 2.8% compared with Quarter 4 2022. Factor income outflows were €2.7 billion higher than in the previous quarter, leading to an overall decline in GNP of 6.9% when compared with the previous quarter.
The MNE dominated sectors of the economy contracted by 9.0% overall in Quarter 1 2023. The Industry sector recorded a significant decrease over the same period compared with the previous quarter, falling by 13.2%, more than offsetting the growth in the Information & Communication sector of 4.9% in the quarter. Sectors focused on the domestic market experienced mixed results in the quarter. The domestically facing Construction sector increased by 4.3% quarter-on-quarter while the Agriculture, Forestry & Fishing sector expanded by 2.1%. Finance & Insurance increased by 8.4% in Quarter 1 2023 while the Distribution, Transport, Hotels & Restaurants sector grew by 1.7%. The Arts & Entertainment sector recorded a marked decline of 22.3% in the quarter while Professional & Administrative services fell by 2.5%.
Looking at expenditure in the economy, Investment in capital formation decreased by 16.5% in the quarter explained by a fall in investment in intangible assets when compared with Quarter 4 2022. Personal spending (PCE) increased by 0.1% in the quarter, as did MDD.”