Pádraig Dalton is director general of the Central Statistics Office. Photo: Mark Condren
The Irish economy shrank by more than initially thought last year, with a contraction of 5.5pc, according to new data from the Central Statistics Office (CSO).
The economy, measured using the standard gross domestic product (GDP) tools, fell by 5.5pc in 2023 driven by a contraction in multinational-dominated sectors.
The fall was the biggest anywhere in the European Union last year and compares to a previous estimate that the economy shrank by 3.2pc.
However, using the modified gross national income (GNI*) measurement that strips out the distorting effect of multinationals, the economy grew by 5pc, the CSO said.
The Irish economy grew in the first three months of 2024 using the GDP measurements, despite signs of continued contraction in the industry and a steep decline in investment, though that is affected by internal structuring within multinationals.
Commenting on the figures Minister for Finance Jack Chambers said: “While I recognise that GDP fell last year, GDP is not a useful measure in assessing the living standards of domestic residents, given the outsized role the multinational sector plays in our economy.
“The annual decline reflects the volatile nature of multinational production. For instance, pharma exports surged during the pandemic, with Ireland a major hub for the production of vaccines and therapeutics, driving export growth and GDP.
“With the pandemic firmly in the rear-view mirror, these exports eased back, causing a negative drag on exports and GDP. With this Covid effect having now washed out of the data, the underlying strength in the sector is clear from very strong growth throughout the early part of this year which, along with computer services, drove export growth of 7pc in the first quarter.”
