Modest growth for Republic of Ireland's economy
Consumer spending grew at a 'solid pace', Ireland's finance minster says
- Published
The Republic of Ireland’s domestic economy grew by 0.5% in 2023, official figures suggest.
Irish domestic output is estimated using a measurement called Modified Domestic Demand (MDD).
The economic performance of most countries is measured using Gross Domestic Product (GDP), but Irish GDP is heavily distorted by the activities of multinational companies.
The figures suggest that Irish GDP shrank by 3.2% in 2023.
Typically, GDP overstates the growth rate of the Irish economy, but over the last year it has swung the other way.
A significant reason is sales and exports by Irish-based pharmaceutical firms coming off their pandemic highs.
Jennifer Banim, head of National Accounts at the Central Statistics Office (CSO), said: "The more globalised sectors of the economy contracted for the first time since 2013 with Industry shrinking by 11%.
"Overall, the multinational sector contraction was 6.8% and in 2023, these sectors accounted for 51.5% of total value added in the economy."
Interest rates 'hit disposable income'
Finance Minister Michael McGrath said the MDD performance had been "modest" but pointed to other signs of resilience in the economy.
"Consumer spending grew at a solid pace of 3.1% last year," he said.
"This was underpinned by strong employment growth – figures published last week show a record 2.71m people in employment in the fourth quarter of last year.
‘The strength of the labour market – with 90,000 jobs added in the last twelve months – is a good measure of the underlying health of the domestic economy."
However, he acknowledged there was evidence of slowing consumer spending at the end of last year as higher interest rates hit disposable incomes.