GDP shrank by 3.2% in 2023 According to CSO

The Central Statistics Office has recently published its quarterly report for the end of 2023. Some of the highlights include:

  • Personal spending on goods and services increased by 3.1% in the year and is now 10.2% higher than the pre-pandemic peak level of spending in 2019.
  • Modified Domestic Demand (MDD) a broad measure of underlying domestic activity that covers personal, government, and investment spending, rose by 0.5% in 2023.
  • Multinational-dominated sectors contracted by 6.8% in 2023 with all other sectors growing by 3.8%.
  • Compensation of Employees increased by 3.3% in real terms in 2023 compared with 2022.
  • The Balance of Payments Current Account recorded a surplus of €49.8 billion in transactions with the rest of the world in 2023, a fall of 8.8% compared with 2022, driven by a €40.6bn disimprovement in the Merchandise Trade balance.
  • In quarter-on-quarter results, Gross Domestic Product (GDP) fell by 3.4% in Quarter 4 (Q4) 2023 compared with Q3 2023 (See Editor’s Note below), while MDD decreased by 0.4% in the quarter.

Jennifer Banim (Director General for National Accounts and Prices Statistics) has said, “The impact of ongoing global events and decelerating inflation varied across the sectors of the economy in 2023 and today’s results show the overall annual impact and the underlying quarterly variations. The more globalised sectors of the economy contracted for the first time since 2013 with Industry shrinking by 11.0%. The Information & Communication sector continued to grow however, increasing by 8.0% in 2023. Overall, the multinational sector contraction was 6.8% and in 2023, these sectors accounted for 51.5% of total value added in the economy.”

The domestic market saw some positive turns with the Financial and Insurance sector growing by 7.5%, the Distribution, Transport, Hotels & Restaurants sector by 4.5% and finally the Agriculture and Forestry & Fishing sector by 15.4%.

Banim continued, “Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) increased by 3.1% in 2023, while Government spending on goods and services rose by 1.7% in the year. Examining PCE at constant price levels over the past four years, personal spending reached €128.7 billion in 2023, a further recovery compared with the 2022 result of €124.8 billion, and 10.2% higher than the €116.8 billion pre-pandemic peak level of spending in 2019. PCE accounted for 28.0% of Gross Domestic Product (GDP) in 2023, up from 26.3% of GDP recorded in both years 2022 and 2021”.

It is believed that the 3.2% fall in GDB is a result of an overall fall in Irish exports during the year.


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