Irish GDP grows 6.5% in second quarter

Ireland's gross domestic product grew by 6

Ireland's gross domestic product grew by 6.5 per cent in the second quarter of the year compared with the same quarter in 2001, the Central Statistics Office (CSO) said today.

Publishing national quarterly accounts data, the CSO also said gross national product (GNP) grew four per cent year-on-year in the second quarter.

In the first half of 2002, the economy grew by 5.5 per cent from the same period last year, while GNP rose by 2 per cent.

While the quarterly figures appeared relatively strong given a sharp slowdown in the economy since last year, economists noted the gap between GDP and GNP as a concern.

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Most economists consider GNP a better annual measure of Irish growth, because GDP figures are distorted by the high number of US multinationals with Irish bases whose profits flow out of the country.

In 2001 as a whole GDP increased by 5.7 percent in 2001, while GNP grew by 4.6 percent.

Mr John Beggs, chief economist at Allied Irish Banks Global Treasury, said the first-half figures were broadly in line with the rates he was forecasting for 2002.

"The likelihood is that the numbers will slow as we go through the second half of the year. At this stage we think GDP growth for the year as a whole will be four per cent, and GNP only 1.5 per cent," he said.

"On a half-year basis there's a 3.5 per cent gap between GDP and GNP and that reflects the fact that a lot of growth in the economy is coming from the multi-national sector," Mr Beggs added.