Irish economy grew strongly in 2023
The labour market, which has been at full employment since mid-2022, has been a contributing factor
- Published
The Republic of Ireland's economy grew strongly in 2023, official figures suggest.
The headline measure, gross national income (GNI), expanded by 5% according to the Central Statistics Office (CSO).
Most countries use gross domestic product (GDP) as the key measure of economic performance but Irish GDP is badly distorted by the activities of multinational companies.
GNI, which has been used since 2017, strips out the most distorting effects to give a more accurate picture of the real economy.
It involves subtracting the retained profits of some firms which have Irish HQs and making adjustments for some foreign-owned assets which are located in Ireland.
In contrast to the increase in GNI, there was a 5.5% fall in GDP due to reduced goods exports by multinational companies.
The CSO’s assistant girector general, Chris Sibley, said: "The more globalised sectors of the economy contracted for the first time since 2013. Overall, the multinational sector contraction was 16.2%."
By contrast the figures point to a recovering domestic economy with personal spending on goods and services rising by almost 5% in 2023.
'Strength of the labour market'
The Irish labour market has performed strongly over the last year with unemployment at record lows.
Minister for Finance Jack Chambers said the CSO figures confirmed strong growth in the domestic economy.
"Despite facing significant inflationary pressures, consumer spending nevertheless drove growth in the domestic economy," he added.
"This performance reflects the strength of the labour market, which has been at full employment since mid-2022."
Figures for the first quarter of 2024 suggest the growth momentum has continued.
The key short term measure of domestic economic performance, modified domestic demand (MDD), grew by 1% compared to the final quarter of 2023.
Mr Chambers is planning to increase public spending by almost 7% in a pre-election budget in October.
He has faced criticism from an independent spending watchdog that a generous budget risks reigniting inflation.