The Irish economy remains in a technical recession, according to preliminary data from the Central Statistics Office (CSO), which shows gross domestic product (GDP) declined by 0.7 per cent in the last quarter of 2023 compared with the previous three months.
The CSO said “early estimates” indicate that GDP has fallen by an estimated 0.7 per cent in the quarter. It said the result was driven mainly by decreases in the multinational-dominated sectors.
It said GDP is also estimated to have decreased by 3.4 per cent when compared with the same quarter in 2022. GDP for the full year 2023 is estimated to have decreased by 1.9 per cent when compared with 2022.
This was the fifth consecutive quarter of decline, meaning that the Irish economy is technically in recession. A country is deemed to be in a technical recession when it undergoes two consecutive quarters of contraction in GDP.
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Rachel O’Carroll, senior statistician in the national accounts data collection and quality division, said the drop in volume terms was driven by decreases in the multinational-dominated sectors of industry and information and communication.
National accounts published by the CSO last month showed the Irish economy contracted more than initially expected in the third quarter between July and September as GDP fell by 1.9 per cent.
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In that case, the decline was greater than the preliminary estimate published in October, which put the GDP contraction at 1.8 per cent. The national accounts covering the fourth quarter will be published by the CSO in the coming months.
The decline in the third quarter was again driven by a contraction in multinational industry as multinational-dominated sectors account for more than half (52 per cent) of all total value added in the economy.
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Sectors dominated by multinationals contracted by 3.8 per cent in the third quarter, and all other sectors shrank by 0.7 per cent.
Minister for Finance Michael McGrath noted at the time that GDP “is not a useful measure in assessing the living standards of domestic residents given the outsize role the multinational sector plays in our economy”.
He added that a decline in that quarter reflected an ongoing fall off in demand for Covid-related pharmaceutical products.
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