In the heat of July’s incendiary revision to gross domestic product (GDP) – the one that lifted us from fast-growing EU economy to the stuff of leprechaun ridicule – the Central Statistics Office (CSO) did what all institutions do in times of crisis: kick the can down the road by promising an investigation.
The statistics agency said it would convene a “high-level cross-sector consultative group” to examine how best to record economic activity and to provide insight and understanding of all aspects of the Irish economy.
What else could it do? The data which generated the 26 per cent had been compiled correctly and was in line with international standards even if it did make Ireland look like the Cayman Islands on speed.
There may have been a case to say the Government should have come out earlier to explain the anomaly instead of letting the statisticians spring it on a surprised public and an even more bewildered international community.
Calculations
That is all water under the bridge now, however, but a question remains as to what the CSO can really do about these fantastical figures, other than hope they don’t recur.
Its consultative group, which includes Central Bank staff, is due to hold its first meeting after the publication later this month of the next set of quarterly growth numbers.
The group will almost certainly look at publishing supplementary national accounting measures such as net domestic product (NDP) or net national product (NNP), which refers to the monetary value of finished goods and services produced by a country’s citizens minus depreciation, in other words how much a country can consume in a given period.
They may remove some of the kinks in Ireland’s headline metrics but they are hardly going to replace the global standards of GDP and GNP (gross national product) or even be considered amid the dazzling array of economic data already surfing the ether.
There was a time when we were exhorted to view GNP, which strips out the profit flows of multinationals, as the proper indicator of growth here, but even this measure surged by 18 per cent last year. It seems there’s little the CSO can do but grin and bear it.
