Quarterly Economic Commentary, Spring 2013
If current forecasts of an improvement in the international environment in 2014 are realised then the Irish economy could grow by around 2.7 per cent, according to the latest analysis in the ESRI Quarterly Economic Commentary.
Growth in GDP of 1.8 per cent is expected in 2013. Next year, reflecting stronger growth in exports of goods and services and growth in domestic demand we expect that GDP growth will improve to 2.7 per cent. Our forecasts are based on the assumption that the European economy returns to growth in 2014. In recent years forecasts for economic growth in Ireland’s main trading partners have been revised downwards. If the anticipated international upturn does not occur, then the outlook for the Irish economy is less positive than we have forecast in this Commentary. Traditionally GNP has provided a better measure of economic activity in Ireland. However, this has been affected in recent years by the profit flows of redomiciled plcs. Adjusting GNP to take account of these flows finds the contraction in the Irish economy was much deeper in 2009, the Irish economy actually contracted in 2010, rather than showing moderate GNP growth, and was marginally weaker in 2011, while GNP growth in 2012 was approximately 1 percentage point lower than official estimates. If the pattern persists then adjusted GNP growth will be lower than forecast and any boost to growth from a fall in the balance of payments surplus will be smaller than had been previously anticipated.
Note to Editors: 1. The Quarterly Economic Commentary, Spring 2013, by David Duffy and Kevin Timoney (ESRI), will be published online on the ESRI website on Thursday 16 May 2013. 2. This Quarterly Economic Commentary (QEC) includes the following Research Notes:
- "The Effect of Re-domiciled Plcs on Irish Output Measures and the Balance of Payments", by John FitzGerald (ESRI) - to be published online 16 May.
- "Measuring Credit Constraints for Irish SMEs", by Conor O'Toole, Petra Gerlach-Kristen and Brian O'Connell (ESRI) - published online 13 May.
- "Younger and Older Households in the Crisis", by Petra Gerlach-Kristen (ESRI) - published online 13 May.
- and the following Research Bulletin article:
- "How Much Does It Cost the Economy when Essential Services are Interrupted?", by Seán Lyons and Edgar Morgenroth (ESRI) - published online 14 May.
ESRI Research Bulletin Articles provide short summaries of work published by ESRI staff. They are designed to be easily accessible to a wide readership. A reference or references to the full publication(s) is included at the end of each Bulletin article, as is the contact email address of the authors. The ESRI is an independent research institute. The Institute does not take policy positions and the views expressed in ESRI publications are those of the authors. All ESRI reports are peer-reviewed prior to publication.