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Press Release

Minister Donohoe welcomes Q4 GDP numbers confirming continued momentum in the economy

Published: 6 March 2020
From: Department of Finance
  • GDP grew by 6.2 per cent year-on-year in the fourth quarter of 2019.
  • Full-year GDP growth of 5.5 per cent for 2019 as a whole.
  • Modified final domestic demand – a better proxy for the domestic economy – grew by 3 per cent in 2019.
  • New housing output up 19 per cent in the fourth quarter.
  • A large increase in investment in IP assets in 2019 – though impact GDP neutral as IP assets imported.
  • Exports reached a record level of €119 billion in the fourth quarter.

The CSO today (Friday) released the Quarterly National Accounts for the fourth quarter of 2019 and preliminary estimates for the full-year of 2019. Commenting on the figures, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T,D, said:

“Despite significant external headwinds last year, not least slowing global growth and Brexit-related uncertainty, today’s figures confirm the resilience and momentum in our economy. While annual growth in GDP remains strong, the domestic economy is also growing at a robust rate, with modified domestic demand up 3.0 per cent last year.

“These figures are very much in line with a range of other indicators such as employment growth and taxation receipts. For instance, the level of employment increased by 2.9 last year, the seventh straight year of employment growth of that rate or higher.

“Overall growth in the economy continues to be broad-based, with positive contributions from both the domestic and multinational sectors. Exports reached a record level of €119 billion, the fifth successive quarter above €100 billion. This shows the resilience of our economic model in the face of external headwinds. On the domestic side, investment in new housing increased by 19 per cent, reflecting a much needed pick-up in supply. Overall, we are seeing continued improvements in living standards.

“Early indications suggest solid growth in the first quarter this year, in light of the monthly unemployment rate of 4.8 per cent recorded in February, as well as robust retail sales figures for January and strong Purchasing Managers’ Index (PMI) figures for January and February. More recently, tax revenues are up 14 per cent for January and February as a whole.

“Of course, we are now heading into a precarious trading environment as a result of the spread of Coronavirus. While primarily a public health and well-being issue, the economic impacts have the potential to be significant. While the actual cost – in terms of lost global GDP – will depend on the extent and duration of the outbreak and the containment measures put in place, already this week the OECD set out a scenario which saw global growth being cut by as much as half the previous forecast. Careful management of the economy and the public finances in recent years means that we enter this period of uncertainty from a position of strength.”

Ends

Note to editors: Modified (final) domestic demand, a proxy for the domestic economy, is the sum of personal and government consumption and investment, excluding investment in imported IP and aircraft for leasing. It also excludes changes in the value of stocks.

Overall investment in the economy in 2019 reached €142 billion, a record level, of which €91 billion was in the form of ‘R&D service imports and trade in IP’. These assets, which add to Ireland’s capital stock, are imported from abroad and thus have an offsetting impact on GDP through higher imports, such that the economic impact of the investment in the quarter is GDP-neutral.

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