Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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70. To ask the Minister for Finance if he has read the Central Statistics Office, CSO, report containing figures of 26% growth in the economy. [22768/16]

Michael Noonan (Limerick City, Fine Gael)
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The Central Statistics Office (CSO) published the National Income and Expenditure results for 2015 in July which show that the economy grew by 26.3 per cent.

This substantial upward revision 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;

It is important to note that these factors do not reflect activity levels we are seeing on the ground. Although these revisions have significantly boosted investment and net export growth, they do not have a direct bearing on employment and wealth creation for Irish citizens.

It is important to stress that whilst these headline GDP figures have clearly been distorted and are exaggerated in an Irish context, more concrete indicators of the underlying levels of economic activity point to a continuation of a now firmly-rooted recovery. Specifically, indicators such as consumer spending, tax trends and labour market developments all confirm that Ireland's economic fundamentals remain strong.

It is also important to stress that the figures published by the CSO are compiled in accordance with best international practice and statistical standards. They measure what they are supposed to measure. However, in a small, open and very globalised economy such as Ireland, it is clear that relevance of these figures as a metric by which underlying economic trends and changes in living standards can be assessed is considerably less than elsewhere.

With this in mind, the Central Statistics Office has put together a group of experts to provide guidance on how a more relevant indicator could be produced and published alongside these figures in the future.  My Department is represented on this group. It is expected that this group will publish a report detailing their findings later this year.