Pharmaceuticals and tech sectors help GDP grow by an estimated 5.5% during third quarter 

The value of exports in July was up 12.5% to nearly €19bn. File picture: Larry Cummins

Ireland’s gross domestic product (GDP) is estimated to have grown by 5.5% between July and September, compared to the previous quarter, driven by the pharmaceuticals-dominated industry sector as well as the tech sector, new data from the Central Statistics Office (CSO) shows.

These latest figures come during a volatile year for Ireland’s GDP. During the first quarter of the year, GDP contracted by 7.8% before rebounding and growing during the second quarter by 10.2%.

The CSO said that the increase in the third quarter was largely a result of increases in the multinational-dominated sectors of industry as well as information and communication.

Exports are a large component of GDP. The CSO has not yet published the figures for September but August’s data shows the value of Irish exports declined by 1.2% compared to last year driven by a 9% fall of the value of goods sent to both the US and EU.

However, the value of exports in July was up 12.5% to nearly €19bn.

Exports of medical and pharmaceutical products, one of the country’s largest export categories, decreased by €433.9m to €6bn during August compared to the year before. In July, the value of medical and pharmaceutical products was up by €17.9m to €6.9bn year-on-year.

The figures published on Thursday by the CSO are also preliminary estimates and are subject to revision. The first quarter of the year had a significant revision to preliminary GDP estimates. Initially, the CSO saw a contraction of 12% before being revised to 7.8%.

The bounce back in GDP during the second quarter of the year was also due to the performance of the multinational sectors. The globalised industry sector expanded by 22.1% alone compared to the first quarter.

These preliminary results are subject to revisions in the Quarterly National Accounts for quarter three which will be published in early December.

GDP is not the preferred measure of the growth of the Irish economy as it can be skewed heavily by the presence of the numerous multinational firms with operations here. As a result, other measures such as modified domestic demand (MDD) or modified gross national income (GNI) are used as they both strip out the impacts of multinationals.

The CSO did not publish any preliminary estimates for growth in MDD or modified GNI. According to a new report by AIB, MDD is expected to grow by 3.8% over the course of this year before slowing to 3.1% next year.