Multinationals boosted Ireland’s economy in Q4 2022, with faster growth in the sector than in the two previous quarters, estimates from the Central Statistics Office (CSO) showed.
Early estimates indicate that gross domestic product (GDP), which measures multinational activity in the economy, grew by an estimated 3.5% in Q4 when compared with Q3.
This growth was mainly driven by expansion among large manufacturers in the same period that tech multinationals started experiencing a slowdown, which has led to around 100,000 job cuts across the globe.
Ireland’s GDP growth climbed 13.5% higher in the last quarter when compared with Q4 2021.
GDP for 2022 is estimated to have increased by 12.2%, when compared with 2021 but experts have hinted that this growth is likely to slow this year due to the ongoing volatile economic environment. For example, the IDA Ireland predicted foreign direct investment activity will become more sluggish in the second half of 2023.
The European Central Bank (ECB) is set to lift interest rates by another 0.5% this week to try and get inflation under control, adding to what’s already the most aggressive tightening campaign in its history.
Meanwhile, as estimates indicate growth in Ireland’s economy, new figures show Germany’s economy shrank 0.2% at the end of last year.
This is a worse outcome than previously flagged and one that makes a recession on the back of rising energy bills more likely after all.
The figures from a separate statistics office contrast with an estimate this month for output to have stagnated in the fourth quarter. They also mean a contraction in the period through March would still produce a recession in the euro area’s largest economy.
Demand is weighed down as surging prices continue to filter through to consumers. That trend was also visible in Sweden, whose economy unexpectedly contracted in the fourth quarter, other data showed.
“We expect more of the same for early 2023, namely a modest decline in real GDP reflecting mostly lower consumption,” said Salomon Fiedler, an economist at Berenberg. “Following the mild winter recession, the economy is likely to stabilise in spring and start to expand significantly again in mid-2023.”
Elsewhere, Belgium grew 0.1% and Latvia grew 0.3%, while euro area economic confidence rose for a third month in January.
- Additional reporting by Bloomberg