Dr. Kieran McQuinn:

It is a relevant point. Regarding the issues with GDP and the national accounts, I suppose it is fair to say that the new standards or accounting criteria - the ESA 2010 framework - did not really come in until approximately two years ago. As Professor Barrett has said, there have been long-standing issues with looking at the Irish national accounts. Our former colleague, Professor John FitzGerald, recently wrote a paper chronicling most of the various issues that typically affect our accounts. We are particularly vulnerable because we have a small open economy, we have relatively low corporation tax and we have a great deal of inward foreign direct investment and multinational activity. As a result, we are particularly sensitive to some of these national accounting issues. Without going into the actual technical detail, the main reason we have many of these problems is the changed way EUROSTAT looks at these national accounting issues - the way it views whether a firm is resident in or owned in a country and whether its activity takes place in that country - following the introduction of ESA 2010.

I would like to respond to the Deputy's question about the effect on investor sentiment of having a rival GDP series by asking her to imagine what would transpire if the opposite had happened and the official GDP figure had fallen by 26% because of some multinational activity. While it can be presumed that everyone would know that the Irish economy had not fallen off the edge of a cliff, the tickertape on Bloomberg would still be saying "Irish GDP down by 26%". One of the effects of the release of such results could be Ireland staying at the centre of international news for a couple of days. It is very important that we have something like this for GDP, in particular, because GDP is central to things like the debt-GDP measurement used by the Commission as part of the fiscal rules. It is part of the official Estimates and is used to calculate the output gap. It is important that we have some idea of output in the economy that reflects what is actually going on in the economy. We typically go beyond it in our overall assessments of the economy by looking at issues like what is going on in the labour market, in the tax take and in consumption. Such measurements are specifically tied to activity in the Irish economy and, apart from corporation tax receipts, are less influenced by developments in the multinational sector.