'Statistical reclassification' sees 26.3% economic growth; Michael Noonan sees no need for more cuts

'Statistical reclassification' sees 26.3% economic growth; Michael Noonan sees no need for more cuts

New figures from the Central Statistics Office show a dramatic growth of more than a quarter in the Irish economy last year.

Revised Income and Expenditure Accounts just published for 2015, show GDP growth of some 26.3%.

However, growth in the Irish economy fell in the first quarter of this year.

The Quarterly National Accounts for January to March, show that GDP fell by 2.1%.

In the same three months, GNP which measures the domestic economy, showed growth of 1.3%.

Chief Economist with KBC Bank, Austin Hughes, says we should not get over excited by the numbers.

He said: "The numbers today are quite extraordinary, but the change we are seeing is largely statistical. We haven't woken up this morning to see ourselves 20% richer.

"The reality is that there has been a statistical reclassification of the Irish economy, and as a result measured GDP last year rose by 26%."

Finance Minister Michael Noonan said the "phenomenal" numbers, combined with growing employment and increased consumer spending were signs of "real growth".

The rates have been explained in part by an increase in the number of foreign owned companies registering their business in Ireland, the first year of the knowledge box system of registering patents and the reclassification of company's balance sheets.

Mr Noonan, in Brussels for talks with European counterparts, said: "I think the figures released by the Central Statistics Office show that Ireland's economy continues to grow.

"Peoples' lives are improving with more at work than at any time since the onset of the downturn.

"We no longer need to impose swingeing cuts to public services rather we have room to invest in services and infrastructure.

"Ireland is now in a position where we borrow relatively small amounts at very low rates which ensure that investment is made in delivering more than the bare minimum of services to our citizens. These are all evidence of a country growing in real terms."

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