The Irish economy, as measured by real GDP, contracted for four consecutive quarters last year, with the annual figure falling by 3.2% . Nominal GDP also declined, to \u20ac505bn from \u20ac506bn in 2022. The pace of decline accelerated through the second half of the year and real GDP fell by 3.4% in the final quarter, substantially worse than the initial -0.7% flash estimate. That left the annual change in the final quarter at -8.7%, which gives a very weak carry over into 2024, and the economy may well struggle to record positive growth even with a recovery in external trade.<\/p>\n\n\n\n
Exports have been the engine of Irish growth for a long time now but 2023 saw a sharp reversal of the seemingly inexorable rise, with a 4.8% fall in volume terms following double digit annual gains over the previous four years. Service exports held up well, rising by over 8%, but there was an extraordinary collapse on the merchandise side, by \u20ac45bn or 13%. Goods shipped from Ireland fell by \u20ac10bn, reflecting weaker Pharma and organic chemicals, but goods outsourced to production abroad, largely in China, fell by \u20ac34bn, probably down to a specific phone manufacturer.Exports in total ended the year down 9.5% so a strong recovery would be required to give positive export growth for 2024.<\/p>\n\n\n\n
Imports had also weakened through the year but rebounded sharply in q4 on the back of a surge in service imports related to intellectual property. That resulted in a modestly positive import growth for the year as a whole. The IP service import is also captured and offset by Intangibles in capital formation (therefore largely GDP neutral), so that component also rose modestly in 2023, despite a 1% fall in building and construction.<\/p>\n\n\n\n
Consumer spending rose by over 10% last year, but prices increased by 7% so spending in real terms grew by 3.1%, with a notable switch by consumers to cars and services amid soft retail sales. Despite this growth, modified domestic demand rose by only 0.5%, dampened by the fall in construction and a decline in investment in machinery and equipment.<\/p>\n\n\n\n
These GDP figures and indeed the modified domestic demand outturn sit uneasily with other data such as tax receipts and employment growth (up by 90,000 last year or 3.4%) and in this case GNP might be a better reflection of underlying economic activity: that adjusts GDP for profit and interest flows, and the net outflow was lower last year so GNP actually rose strongly, by 4.4%. <\/p>\n","protected":false},"excerpt":{"rendered":"
The Irish economy, as measured by real GDP, contracted for four consecutive quarters last year, with the annual figure falling by 3.2% . Nominal GDP also declined, to \u20ac505bn from \u20ac506bn in 2022. The pace of decline accelerated through the second half of the year and real GDP fell by 3.4% in the final quarter, … Continue reading “Irish economy contracts by 3.2% in 2023.”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-325","post","type-post","status-publish","format-standard","hentry","category-irish-gdp"],"_links":{"self":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=325"}],"version-history":[{"count":3,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/325\/revisions"}],"predecessor-version":[{"id":328,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/325\/revisions\/328"}],"wp:attachment":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}