Pearse Doherty (Donegal, Sinn Fein)
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147. To ask the Minister for Finance in view of last weeks revised 2015 GDP growth figure of 26.3% and it's impact on our debt to GDP ratio, if the Minister's Department has conducted risk analysis as to whether this improvement in our debt to GDP ratio could move very fast in the opposite direction in the medium term as a result of multinational corporations reversing some of their recent decisions or reclassification directives from the EU, leaving our ability to borrow in a precarious position; and if he will make a statement on the matter. [23974/16]

Michael Noonan (Limerick City, Fine Gael)
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The 2015 National Income and Expenditure data published last week by the CSO revised Ireland's 2015 GDP level upwards significantly. This has resulted in a mechanical improvement in the general government debt-to-GDP ratio. In April the CSO estimated the end-2015 debt-to-GDP ratio at 94%. Following the recent revisions to GDP figures, it is now estimated at 79%.

Notwithstanding the potential distortionary impact of these statistical revisions, more concrete indicators of the underlying levels of economic activity such as consumer spending, tax trends and labour market developments all corroborate that Ireland's economic fundamentals remain strong and point to a continuation of a now firmly-rooted recovery. In turn, these developments underpin the sustainability of our public debt dynamics.

The most important consideration for Ireland's debt sustainability is whether its debt servicing capacity is improving. Based on how the IMF analyses debt dynamics, on any measure of activity GDP, GNP, domestic demand or Net National Income Ireland's economy is growing faster than the average rate of interest on its debt while it continues to run a primary budget surplus. Since the GDP revisions, the rating agencies Fitch and Moody's have stated that Ireland's debt sustainability continues to improve across a range of metrics.

Investors and rating agencies use a number of other ratios that are unaffected by last week's GDP revisions, including general government interest to general government revenue and general government gross or net debt to general government revenue.

My Department also analyse these developments. For instance, the ratio of general government interest to revenue is on a firm downward trajectory and stood at around 9.5% last year, down from almost 12.5% in 2013, meaning a reducing proportion of the State's resources are now required to service the debt. This ratio is expected to continue to decline over the medium term.

The gross general government debt to revenue ratio is another appropriate indicator and this ratio has also improved significantly in recent years, dropping to 286% in 2015 from over 355% in 2012.

The State also holds significant cash and other assets, meaning that net debt is well below the headline gross debt figure.

In summary, while I welcome the continued decline in the debt-to-GDP ratio, I am conscious of the need for in-depth consideration of all the factors that affect our debt sustainability. My Department continually monitors these factors.

Michael McGrath (Cork South Central, Fianna Fail)
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148. To ask the Minister for Finance his views on the way in which Ireland's official level of GDP for 2015 was almost 20% higher than his Department predicted in June 2016; the break down of the components of the unexpected growth; the number of multinational companies that restructured their affairs so that their output came under Ireland's GDP; the identify of the relevant sectors; and if he will make a statement on the matter. [24024/16]

Michael Noonan (Limerick City, Fine Gael)
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The macroeconomic forecasts set out in the Summer Economic Statement were based on preliminary estimates of GDP published by the CSO in March, which incorporated all available information at that time. This is the accepted practice adopted by all forecasting institutions.

The substantial upward revision to the level of GDP in 2015 is largely related to the activities of a small number of large multinational firms and reflects a number of exceptional factors which have limited impact on actual activity in the Irish economy.

The main channels through which these factors affect Irish GDP figures include:

- The effect of 'contract manufacturing' where Irish headquartered multinationals contract the production of goods to third party companies abroad but these products are recorded in Ireland's trade balance;

- The relocation of intellectual property-related assets or patents to Ireland. Ceteris paribus, this will reduce the level of royalty imports and as result increase Irish GDP;

- An increase in new aircraft imports to Ireland for international leasing activities generating substantial fee income without significant employment effects;

A detailed breakdown of the contributions made by each factor is not possible given publicly available data. Also, while it is not possible to identify the exact number of multinational companies that relocated to Ireland it is clear that this revision is largely related to the activities of a small number of large multinational firms in the manufacturing and aircraft leasing sectors.