Minister McGrath welcomes the CSO’s first ‘flash’ quarterly estimate of GDP

for the first time, the CSO published a T+30 day (that is, one-month) ‘flash’ quarterly estimate of GDP
in fourth quarter of 2022, GDP is estimated to have increased by 3½ per cent compared to the previous quarter
on an annual basis, GDP in the fourth quarter is estimated to have increased by 13½ per cent
as a result, the first estimate of GDP growth in 2022 is 12¼ per cent
this timely release of GDP is useful for giving insight into the performance of the multinational sector and tallies with corporation tax and exports data for last year
a measure of domestic economic activity – Modified Domestic Demand – will be published in early March with the detailed (T+60 day) release

The CSO today (30 January) published its first t+30 day (that is, one-month) ‘flash’ estimate of quarterly GDP for Ireland. Commenting on the figures, Minister for Finance Michael McGrath said:

"I welcome the CSO’s publication of a flash estimate of GDP for the fourth quarter of 2022, which 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 is a welcome development and serves as a useful and early complement to the more detailed release due out in early March.

"The flash release indicates that GDP grew by 3½ per cent in the fourth quarter of 2022 and by 12¼ per cent over 2022 as a whole. While some volatility is likely between this flash release and the detailed release in March, it is broadly in line with what my department projected for 2022 at Budget time and reflects the continued strength of the multinational sector in Ireland last year. Other metrics mirror this growth, such as very robust goods exports and strong corporation tax receipts last year.

"Whilst GDP continues to grow robustly, it does not reflect events on the ground in the domestic economy as it is greatly influenced by the outsized role that the multinational sector plays in our economy. A more accurate measure for domestic economic activity in Ireland is Modified Domestic Demand and its drivers such as consumer spending and private sector investment. I await the publication of MDD in early March, which is likely to show a more modest picture last year, particularly for the fourth quarter.

"Internationally, incoming data suggest that the downturn may not be as severe as previously assumed. The IMF signalled last week that it will make a modest upward revision to its growth forecasts for this year, which are due out tomorrow, owing to reduced price pressures, increased fiscal supports and the re-opening of the Chinese economy following its zero-COVID policy.

"While set to remain relatively high over 2023, inflation in Ireland appears to have peaked sooner than had been expected, driven by an easing in energy prices, some of which has already been reflected at the pump. I am encouraged that despite numerous headwinds, our labour market continues to perform strongly with close to record-low unemployment rate of just 4.3 per cent in December.

"My department will publish updated forecasts for the Irish economy in the Stability Programme Update in April.”

Notes

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.

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.

In the first eleven months of 2022 goods exports, which are driven largely by multinational exports, increased by 26 per cent on an annual basis. Corporation tax receipts increased by 47 per cent in 2022.