THE economy contracted by 2.6% in the first quarter of 2017 but continues to grow at a reassuring 6.1% in annual terms, according to the latest figures from the Central Statistics
Office. This mixed message underlines how very precarious economic planning can be.
Growth in the last quarter of 2016 has been revised up to 5.8%, but growth for the whole year was cut to 5.1% from 5.2%.
While other indicators — retail sales and business surveys — detail a continuing recovery in the first quarter, multinationals continue to have a disproportionate impact and gross domestic product (GDP) figures are distorted. To counter this, to get a more accurate picture, the CSO has developed a modified measure of the size of the economy — gross national income (GNI) — which removes much of the spectacular volatility in the national accounts associated with multinationals.
When applied to last year’s data, the value of Ireland’s national income drops by a third from €275.6 billion in GDP terms to €189.2bn. This, in the plainest of terms, underlines our dependency on foreign investment.
It underlines too the threat posed by measures promised by President Trump “to bring American jobs home”. Despite that, Brexit remains the greatest threat to our continued economic security and capacity to build a better society.
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