Both multinationals and households helped drive the economy in the third quarter, official figures show, and up-to-date tax revenue returns and a fall in unemployment show that the strong recovery remains in place despite concerns over Covid variants, economists and business leaders say.
New CSO figures showed that mostly thanks to the exports of multinationals, that GDP in the first nine months increased 14.5% from the same period last year when the pandemic first raged, and was also 21.7% bigger than in 2019 before the onset of the crisis.
Other and more accurate measures of Irish economic activity also ballooned, although by the less dramatic amount.
Gross Domestic Product (GDP) grew by 0.9% in Quarter 3 2021https://t.co/Fo8GIl6NlL #CSOIreland #Ireland #NationalAccounts #BalanceofPayments #Economics #Macroeconomics #CapitalStocks #FixedAssets #GovernmentFinances #GovernmentAccounts #EconomicActivity #Output #ValueAdded pic.twitter.com/aPAOix2os1— Central Statistics Office Ireland (@CSOIreland) December 3, 2021
Modified domestic demand increased almost 5% above the level of the first nine months of last year, but tellingly, was still 1.2% below the same period in 2019. That shows the extent to which the crisis is still weighing on many households, the CSO figures suggest.
Finance Minister Paschal Donohoe cited indicators that show the pace of growth in the domestic economy was slowing in recent times, which he said reflected "an element of household caution" in the face of a further wave of the disease. "While the recovery is not yet complete, and has not been uniform across sectors, it is clear that we are moving in the right direction,” Minister Donohoe said.
Economists and business groups said up-to-date tax and labour market figures suggest that a strong recovery remains on course, despite the threat of the Omicron variant.
"It's a good news story," said senior economist Jim Power, citing this week's exchequer returns that showed a large increase in tax revenues across most tax sources, as well as the fall in the Covid rate of unemployment, to 6.9%.
Gerard Brady, chief economist at business group Ibec said the range of economic figures released this week "tell a consistent story of an economy which is experiencing exceptionally strong growth".
The Government has the money to fund measures to help hospitality businesses should they face further restrictions this Christmas, Ibec said.
"This exceptional growth is exemplified by a tax take which was up by €11bn in the January to November period relative to 2020 and even more notably €7.4bn higher than the same period in 2019," Mr Brady said.