merrion street

Data released today (13 March 2014) by the Central Statistics Office (CSO) confirm that the Irish economy contracted slightly (by -0.3 per cent in GDP terms) in 2013. The contraction was largely driven by the impact of the patent cliff in the pharmaceutical sector, which has a large weight in Irish output and exports. Despite the challenging conditions that prevailed in trading partners for the first part of 2013, overall exports continued to grow during the year, and accelerated once again in the final quarter. Investment grew for the first full year since 2007, indicative of a pick-up business confidence.

Gross national product (GNP), which excludes the impact of repatriated profits, expanded strongly, by 4.3 per cent year-on-year. This is reflective of growth in sectors such as agriculture, construction and tourism in 2013. The current account recorded a surplus of 6.6 per cent of GDP in 2013. This is the highest on record and reflective of the considerable competitiveness improvements of recent years.

Commenting on the release, Minister Michael Noonan stated "Today's numbers show that measured GDP in Ireland fell slightly in 2013. By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.

Job creation is the Government’s primary objective and full employment by 2020 is the stated objective in the Medium Term Economic Strategy. In this regard, the fall in unemployment by 3 percentage points over the last two years is welcome and inroads are being made into the unacceptably high level of unemployment

Finally, today’s very successful bond auction by the NTMA, at historically low levels, highlights the significant progress that has being made in recent years and is a vote of confidence in Ireland’s recovery."

The Department of Finance will issue its next set of macroeconomic and fiscal projections with the Stability Programme Update (SPU) in mid-April.