Pearse Doherty (Donegal, Sinn Fein)
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278. To ask the Minister for Finance his plans to introduce a new method of measuring the size of the economy and the growth of same in view of the unreliability of GDP as a measurement in an Irish context; the work which has been carried out by his Department and the Central Bank to date in 2017; the input the EU Commission and the fiscal council have had on the issue; and if he will make a statement on the matter. [27728/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The compilation and publication of statistics on the economy, including GDP, is the responsibility of the Central Statistics Office (CSO), which is independent.

Following the exceptional growth rate recorded in 2015 and the increasing limitations of GDP as a measure of economic activity in Ireland, an Economic Statistics Review Group (ESRG) was established by the CSO last year.

The Group was chaired by the Governor of the Central Bank and was comprised of policymakers, analysts, regulators, business and trade union representatives and academics including inter alia the Irish Fiscal Advisory Council (IFAC), Economic and Social Research Institute (ESRI) and National Treasury Management Agency (NTMA). My Department was represented on the ESRG by the Chief Economist. The Group also benefitted from the expertise of international observers from Eurostat (representing the European Commission) and the IMF.

The remit of the ESRG was to advise on alternative indicators that would provide better indicators of economic trends in Ireland. In relation to the size and growth of the economy, the main recommendation from the ESRG was the publication of an alternative measure of Gross National Income, GNI*, which

(i)   excludes the profits of re-domiciled firms in Ireland;

(ii)  excludes the depreciation of foreign-owned assets (especially the depreciation of intellectual property).

It is important to stress that, from a legal perspective, the CSO is compelled to produce existing national accounts and balance of payments statistics, in accordance with internationally agreed methodologies and that our international obligations are still assessed on this basis (e.g. EU budget contribution is still based on GNI). The purpose of the additional indicator is to provide a better picture of underlying trends in the Irish economy.

I understand that the CSO has committed to publishing this alternative indicator, GNI*, in current prices with the Annual National Accounts in late June/early July.