The Hitchikers’ Guide to the Galaxy, the Douglas Adams book, famously had the instruction “Don’t Panic” on the cover, in large part because its instructions to travellers were seen to be “insanely complicated”.
The Central Statistics Office (CSO) might be well advised to put a similar warning on the cover of the national accounts data which are designed to measure the overall health of the economy. The CSO is, of course, just counting the numbers – it is the activities of the big multinationals which make things complicated and, in particular, the interplay between their real activities here and those driven by tax policy.
So in the blizzard of figures, many of them apparently contradictory, what should we be focused on? The CSO publishes two series generally used by economists to factor out the distorting bits of multinational activity. One is Gross National Income star (GNI*) – a name thought up by statisticians and not marketeers – which grew by 5 per cent last year. The other is modified domestic demand, designed to look at the home economy of consumption and investment, which was up 2.6 per cent and is continuing to grow at an annual rate of over 2 per cent.
This looks like a decent estimate of the bounceback from Covid and an economy where there is now full employment and rising consumer spending.
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The activities of the multinationals are worth watching, too. Certainly exports fell last year, though much of this was due to a decline in contract manufacturing, which is goods manufactured in other countries but organised by Irish subsidiaries and thus counted in the Irish data. A 2023 drop in pharma exports after the Covid bounce was also in play here. Exports are now on the up again.
Of course multinational accounting matters, too, because it affects the Irish corporate tax take. Trends so far this year suggest that, for now anyway, this is still on the increase. Don’t panic, but still keep an eye on this one.
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