The head of International Monetary Fund's mission to Ireland sought an urgent conference call with officials in Dublin after it emerged last month the economy grew by 26 per cent in 2015.
Michael McGrath, the IMF's alternate director for Ireland, Canada and Caribbean region, sent an email to the Department of Finance's chief economist, John McCarthy, on Sunday, July 17th, days after the data was published, to set up a call the following day with the head of the fund's Ireland mission, Zuzana Murgasova.
"I know that a troika call has been arranged for Tuesday [July 19th], but this will be too late for her as she needs to send a note to management on Monday evening," he said in the e-mail, released to The Irish Times under the Freedom of Information Act.
The IMF was working at the time on finalising its annual so-called article IV review of Ireland.
Report
In the event, the IMF published a supplementary note to the 91-page report, saying the fund’s recommendations for Ireland were not impacted by upward GDP revision. The growth figure was driven by the activities of multinationals in the country and distorts the true standing of the economy, it said.
A high-level Irish working group looking into the appropriateness of GDP data to measure the economy is due to report to the Central Statistics Office (CSO) by the end of October, according to the documents released under the FoI Act. Their findings are set to be published thereafter.
The CSO issued invitations to individuals including Central Bank governor Philip Lane, academics John FitzGerald, Frances Ruane and Seamus Coffey and Rossa White of the National Treasury Management Agency to join the group.
Meanwhile, Mr FitzGerald, writing in The Irish Times on Friday, said that the revised Irish GDP last year boosted the size of the euro-area economy by 0.4 per cent.
Mr Fitzgerald said the European Central Bank is likely to ignore the data in assessing its interest rates or other monetary policy, given that the activity had little underlying economic impact.
However, for the European Commission, charged with implementing strict EU fiscal rules, the situation is more complex, he said.
“It too now knows that this addition to EU growth is an illusion and that it should not require an alternation of the fiscal stance for the euro area,” he said. “However, because the commission is governed by rules based on the latest version of the national accounts, it will be more difficult for it to apply common sense.”
