Press release
Minister Donohoe notes final GDP numbers for 2020 which confirm dual economic impact of pandemic
Published on
Last updated on
Published on
Last updated on
The CSO today (14 July) published the final national accounts numbers for 2020 and updated first quarter estimates for this year. Commenting on the figures, Minister for Finance, Paschal Donohoe T,D, said:
“I note the large revision to GDP growth last year, on top of what was already a very strong number. GDP is now estimated to have grown by just shy of 6 per cent, an upward revision of 2½ percentage points. This was driven by upward revisions to exports which reached almost €500 billion for the year, up almost 15 per cent on the previous year. This growth has come from a very small number of sectors with, limited domestic employment. I have said since the onset of the pandemic that GDP is not an accurate measure of what’s going on in the Irish economy, and this view has been re-enforced by today’s numbers.
“My Department and I place a much greater emphasis on measures such as Modified Domestic Demand and GNI* in assessing the underlying economy in Ireland. Modified Domestic Demand fell by 5 per cent last year, and contracted by a further 3 ½ per cent on a quarterly basis in the first quarter this year, a figure that is in-line with expectations and reflects the impact of Level 5 restrictions in the first quarter.
“As I have said before I am encouraged that the impact of the lockdown in the first quarter this year was far less severe than during the first lockdown last year despite comparable levels of restrictions. More recently, the reopening of the economy led to a strong rebound in activity in the second quarter as confirmed by business and consumer confidence indicators, card payments data, as well as June tax receipts. In the labour market, the number on the Pandemic Unemployment Payment has fallen by nearly three-fifths from its peak of 485,000 in early February, to just over 210,000 this week. Further declines are in store in the coming weeks. On the construction side there were close to 10,000 housing starts in April and May, evidence of a rapid rebound in activity and a much-needed increase in supply.
“Following on from the Government’s Economic Recovery Plan last month, which set out a new phase of supports and policies to drive a jobs-rich recovery, the Summer Economic Statement set out a medium term plan to stabilise, or even reduce slightly, the debt-income ratio over the next few years while continuing to invest for the long-term needs of our economy and society. Looked at together the policies set out in these plans aim to secure the recovery and improve living standards in the years ahead.”
Ends, Thursday, 15 July 2021
Note to editors:
Modified (final) domestic demand (MDD), 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.
Modified gross national income (GNI*) is gross national income - essentially GDP less the net amount of incomes sent to or received from abroad - less depreciation on foreign owned intellectual property assets, less depreciation on aircraft for leasing, less the income of Redomiciled PLCs.