Minister McGrath notes the CSO’s ‘flash’ estimate of GDP for the first quarter of 2023

today (27 April) the CSO published its ‘flash’ estimate for GDP in the first quarter of 2023
GDP is estimated to have decreased by 2.7 per cent compared to the previous quarter
on an annual basis, GDP in the first quarter is estimated to have increased by 6.4 per cent
higher frequency data confirm the economy performed well in the first quarter

The CSO today (27 April) published its early (or ‘flash’) estimate of quarterly GDP for Ireland. Commenting on the figures, Minister for Finance Michael McGrath said:

“I note the CSO’s publication of a flash estimate of GDP for the first quarter of 2023. This will be incorporated in Eurostat’s flash GDP estimates for the EU and euro area, due to be published tomorrow. The publication of more timely data serves as a useful and early complement to the more detailed release due out in a month’s time. It is important to note that these are first estimates of GDP, which can often be subject to non-trivial revisions, as was the case last quarter.

“According to the data, GDP contracted by 2.7 per cent in the first quarter of the year. This is likely related to the globalised activities of MNCs. Production and exports are notoriously volatile on a quarter basis.

“For this reason, a more accurate and reliable measure for domestic economic activity in Ireland is Modified Domestic Demand (MDD) and its drivers such as consumer spending and investment. I await the publication of MDD and its components in the next release.

“Last week, my department published its spring forecasts as part of the Stability Programme Update. Despite inflationary pressures, Ireland’s economy has proven to be remarkably resilient. The labour market continues to perform strongly, with an unemployment rate close to record lows, while consumer spending continues to expand. Incoming data relating to the domestic economy, namely jobs numbers, construction activity, and tax receipts point to a solid start to the year.

“Looking ahead, as inflationary pressure eases, real household disposable income is set to recover and will support consumer spending growth, while the fading of the energy price shock should also support higher capital spending by firms.

“I look forward to subsequent releases by the CSO which I expect will confirm the resilience of the domestic economy.”

Notes

This is the second publication of a T+30 estimate of GDP. Heretofore, GDP had been published as part of a suite of other economic data on a t+60 basis, which is an estimate published 2 months after the end of the quarter (that is, 60 days after the end of the relevant quarter). T+30 refers to an estimate published one month after the end of a quarter.

The components of GDP (consumer spending, investment, exports) along with MDD are only published in the detailed T+60 release.

Modified (final) domestic demand, a proxy for the domestic economy, is the sum of consumer spending, government spending and investment, excluding investment in imported IP and aircraft for leasing. It also excludes changes in the value of stocks.