The Central Statistics Office (CSO) has reported that Ireland’s economy experienced a growth of 1.2 percent in its gross domestic product (GDP) during the second quarter of the year, marking the second consecutive growth quarter. This follows a series of contractions observed across four quarters in the previous year, largely influenced by the fall in multinational exports.
The growth recorded in the second quarter has largely been attributed to enhancement in the industrial sector’s activities compared to the first quarter this year.
Nonetheless, the preliminary data for the quarter suggests a year-on-year decrease of 1.4 percent in Ireland’s GDP. The CSO emphasised that these initial figures may undergo adjustments before the next quarterly national report is published in the early part of September, considering a broader set of data sources.
Enda Behan, a statistician with the CSO’s national accounts data collection and quality division stated, “Compared to the first quarter of 2024, the Irish GDP has shown an estimated growth of 1.2 percent in volume terms during the months of April, May and June 2024. This growth surge was primarily propelled by an increase in industry’s multinational denominated sector.”
After factoring in the preliminary data for Q2 2024 with the first quarter estimate from the national accounts, it is anticipated that the GDP for the first half of 2024 has actually shrunk by 3.1 percent in comparison to the first half of 2023.
Department of Finance figures reveal that due to significant contraction in the multinational pharmaceuticals and tech sector last year, the GDP had declined by 3.2 percent. However, modified domestic demand, which serves as a better indicator of the domestic economy, had increased by 0.5 percent in 2024 according to the department’s documentation.
The department has predicted that, following a downturn, the Irish GDP is set to rise by 2.6 per cent in the current year and experience an upsurge of 3.9 per cent in 2025, as per the latest predictions issued in April. They foresee an increase in modified domestic demand by 1.9 per cent in 2024, followed by a further growth of 2.3 per cent in the year to follow.
The government’s outlook on GDP growth stands more hopeful compared to the recent, more cautious estimations elsewhere. The Central Bank anticipates the economy to expand by 1.8 per cent this year, while Bank of Ireland has recently made the decision to lower its annual forecast from 1.5 per cent to just 1 per cent, although it still anticipates considerable growth in the internal economy.
The International Monetary Fund (IMF) announced earlier this month of a modest growth expectancy for the global economy in the coming two years due to slower economic activity in the US, a stabilization in Europe, and improved consumption and export figures from China.
The IMF further cautioned that efforts to counter inflation are losing momentum, which may postpone the possibility to reduce interest rates. However, the IMF’s prediction for global GDP growth in 2024 remains at 3.2 per cent, as estimated in April, with a slight increase forecasted for 2025, to 3.3 per cent.