Economics: Latest Irish GDP figures set to show further robust economic growth
The domestic economic focus on Friday turns to the Quarterly National Accounts for the third quarter. GDP grew by 1.4% in the quarter and 5.8% in the year in the second quarter, with total domestic demand contributing 11.8% and net exports extracting 10.4% in the quarter. Modified domestic demand (which excludes globalisation effects on the economy) contributed 2.1% to GDP growth in the second quarter, with net exports, adjusted for intellectual property and aircraft imports, subtracting 0.7% off national output.
In the first half of the year, GDP was up 5.5% on average on the same period last year, leaving it well placed to top the EU growth league table for the fourth year running. Stripping out the multi-national sector, GNP was down 4.6% in the quarter and 1.4% in the year. Still, for the first half of 2017, GNP was up 2.7% in real terms on the first half of 2016.
Personal consumption of goods and services, an important measure of domestic economic activity, declined by 1.2% in the quarter, but was up 1.7% in the year. The weakness of sterling has been a key factor here, with a sizeable increase in second-hand cars imported from Northern Ireland/UK. The depreciation of the pound versus the euro was also a key factor in the decline in net exports.
We think growth will slow down a touch in the second half of 2017, but are still expecting an overall increase in real GDP this year of 4.5% to 5.5%, as against 5.1% in 2016. For the third quarter we are forecasting quarterly and yearly increases in GDP of 1.0% and 4.8% respectively.