Irish economy continues to expand

It was up by 1.3pc between July and September, according to new national accounts released today by the Central Statistics Office.

MDD is the sum total of all personal and government consumption and investment, and leaves out aviation leasing and imported IP due to statistical distortions related to the multinational sector.

The updated estimate for Gross Domestic Product (GDP) in the third quarter is for an increase of 3.5pc. However for the period January to September, GDP has contracted by 1.7pc compared to the same period last year.

The CSO figures also show that consumer spending fell by 0.2pc in the last quarter, but is up 1.7pc on an annual basis. Government spending on goods and services increased by 4.2pc between January and September compared with the same period of 2023.

Meanwhile, compensation of employees was up 3pc in the first nine months of the year. This comes against the backdrop of a recommendation from the private-sector committee of the Irish Congress of Trade Unions that union officials seek increases of 4pc to 7pc next year.

Jack Chambers, the Minister for Finance, said he was pleased to see the continued strength of the Irish economy.

“Importantly, growth on an annual basis has been broad-based in nature, with both consumer spending (1.7pc) and modified investment (10.4pc) making a positive contribution,” he said. “This solid growth is consistent with the strength of our labour market and the robust exchequer figures released yesterday. Taken together these metrics all demonstrate that the economy has performed strongly this year.”

Mr Chambers pointed out that the figures are retrospective, and that the economic outlook is now becoming increasingly uncertain, with risks clearly tilted to the downside, and the most pressing ones being external.

“As a small, open and highly globalised economy, Ireland is particularly vulnerable to any deterioration in the external environment,” said Mr Chambers, echoing a similar sentiment expressed by Gabriel Makhlouf, the governor of the Central Bank of Ireland, on Wednesday.

“Put simply, these are risks that we cannot control directly – we must instead focus on managing what is in our control,” Mr Chambers added. “In particular, we must continue to build up our fiscal buffers, invest in our people and our infrastructure, and ensure the economy remains competitive.”

The CSO figures also show that output in the globalised Industry sector expanded 14pc in the third quarter compared with the period June to August, while the Information and Communication sector increased by 6.3pc.

“Overall, the combined multinational-dominated elements of the Industry and Information & Communication sectors rose by 9.1pc in the quarter,” it said. “These sectors accounted for 46pc of total value-added in the economy, compared with a 54pc share for all other sectors.”

In the international accounts, the balance of payments recorded a surplus of €23bn in the third quarter, an improvement of €4.3bn on the previous quarter.

“Net exports rose by 8.3pc or €12.1bn in the first nine months of 2024 compared with the first nine months of 2023,” the CSO said. “The €46.4bn increase in exports in the first nine months of the year compared with the same period in 2023 outpaced the growth in imports of €34.3bn.”

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