Analysts: Economy is gathering momentum

A new picture of the economy shows it is much smaller and the country’s debt burden is much heavier but also suggests that the domestic economy is powering ahead.

The new measure of economy, using a version of GNI (gross national income) to better reflect the unique Irish conditions, showed the economy last year was worth just over €189bn, almost a third lower than the €275.5bn under the conventional GDP measure used across the world for international comparisons. The smaller size of the economy means the State’s debt ratio was therefore much higher too, at 106% of the GNI cake instead of 73% of GDP.

But many economists said that both sets of figures — GDP and modified GNI —show an economy that is picking up steam for domestic reasons, as construction and consumer spending picks up, rather than being driven by exports or by accounting around the activity of multinationals. The economy grew by 5.1% in terms of GDP in 2016 — the fastest in the EU— and by an even faster pace under the modified GNI measure.