CSO pharma data ‘understates’ GDP

Irish GDP is understated because of the way the CSO measures production in the pharmaceutical sector, according to Davy Stockbroker chief economist, Conall MacCoille.

Irish-based pharma companies are manufacturing a greater quantity of generic drugs, which leads to an overall reduction in price but not volume, he said. But the CSO treats generic drugs as new products, so it is measured as a reduction in volume, not price and consequently real GDP growth is being erroneously understated, he added.

Speaking at the release of Davy’s Economic Outlook for 2014, Mr MacCoille estimates that true GDP growth may have been 0.1% over the first six months of this year and not the 1.1% contraction according to CSO data.