Multinationals behind unexpected 5.4% fall in GDP in late 2021   

Austin Hughes, chief economist at KBC Bank, said GDP growth of around 5% "now looks likely in 2022" 

Residential construction expanded in the fourth quarter of 2021       

Foreign-owned multinationals, which delivered for the Irish economy during the pandemic, produced an unpleasant surprise for the first time in a long time, as GDP tumbled in the last three months of the year by 5.4%, new CSO figures show.            

GDP is the measure of the economy that best reflects the activity of the large number of multinationals, including Pfizer, Apple, Microsoft, Google, and Intel, which operate substantial European facilities here. 

Even though the economy ballooned by 13.5% in 2021 from 2020 — the highest growth rate in Europe — economists scan the latest quarterly data for any signs of a change in direction. 

GDP grows by 13.5% in 2021 driven by strong upturn in multinational dominated sectorshttps://t.co/Ngd5D7Z9Eh #CSOIreland #Ireland #NationalAccounts #BalanceofPayments #Economy #EconomicIndicators#GovernmentFinances #GovernmentAccounts #EconomicActivity #Output #ValueAdded pic.twitter.com/RnKGA3FwtR

— Central Statistics Office Ireland (@CSOIreland) March 4, 2022

Multinationals have played a starring role in the economic health of the State during the pandemic. They accounted for the lion's share of the corporate tax receipts, or a fifth of all the Government's tax revenue collected last year. 

"Both the surprisingly weak fourth-quarter data and the emerging global outlook suggest that Irish GDP growth in 2022 will be altogether different from the 13.5% figure recorded in 2021," said Austin Hughes, chief economist at KBC Bank.  

GDP growth of around 5% "now looks likely in 2022", which also takes into account "a notably less favourable global backdrop", Mr Hughes said. 

Dermot O'Leary, chief economist at Goodbody, said that the figures show "the bifurcation" between the multinationals and the output of the domestic sector of hotels and restaurants, which was still 8% below its level before the pandemic. 

The CSO figures show that investment, residential construction, as well as imports, climbed in the fourth quarter from the previous quarter.                 

CSO statisticians said that a large jump in investment in computer equipment in the quarter may reflect people returning to offices, although purchases by data centres cannot be ruled out.