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CSO Confirmed Irish Economy Returned to Growth in 1st Quarter

The Irish economy returned to growth in the first quarter of 2024, according to new figures from the Central Statistics Office (CSO). Provisional data shows that Gross Domestic Product (GDP) rose by 0.9% compared to the same period in the previous year, breaking a streak of four consecutive quarters of declining GDP.

Modified Domestic Demand, which excludes the impact of multinationals, increased by 1.4% in the first three months of the year. The GDP growth was primarily driven by a 3.4% rise in the information and communications sector. However, the industrial sector saw a decline of 6.5%, and construction fell by 4.9%. The distribution, transport, hotels, and restaurants sector, significant for the domestic economy, grew by 0.9%, while personal consumption rose by 0.6%.

The CSO data also revealed a 7.3% increase in Irish exports, largely fueled by the ICT sector, while imports decreased by 6.3%.

“While GDP was up in the first quarter, I recognize that GDP continued to fall on an annual basis at the start of this year,” said Minister for Finance Michael McGrath. “As is widely acknowledged, 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, which can swing significantly from one quarter to another.”

Minister McGrath expressed encouragement over the growth in Modified Domestic Demand, which he described as his preferred metric, noting that it grew strongly in the first quarter. He highlighted that consumer spending meaningfully contributed to this growth, increasing by 0.6% over the quarter. He attributed this to the continued strength of the labor market, with nearly three-quarters of the working-age population now employed, and the significant easing of inflation in recent months, which has provided relief for both households and businesses.