Louise O'Reilly (Dublin Fingal, Sinn Fein)
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309. To ask the Minister for Finance if he has read the economic letter from a former Governor of the Central Bank (details supplied) which outlined that the prosperity of the Irish economy ranks somewhere between eighth and twelfth in the European Union, closer to Italy than the more prosperous Nordic states. [13528/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Professor Honohan’s letter compares Ireland’s economic prosperity internationally using per capita measures of Gross Domestic Product (GDP), modified Gross National Income and Actual Individual Consumption. As the letter highlights, using GDP as a comparative measure of the size of the Irish economy internationally is not representative as it does not accurately reflect what is going on in the domestic economy, given the size of our multinational sector. For this reason, modified Gross National Income (or GNI*), which excludes some of the statistical distortions arising from the multinational sector, enables a more meaningful measure of the size of the Irish economy. The letter also uses Actual Individual Consumption, which refers to all goods and services actually consumed by households. While this indicator is a useful guide for economic welfare, international comparisons can be challenging because of the difficulties in comparing the quality of different countries goods and services as well as differing savings rates among countries.

Professor Honohan’s letter indicates that if we use GDP per capita in 2019, Ireland was ranked in second place in the EU, behind only Luxembourg. However, If we use GNI* per capita, Ireland instead was found to rank in eighth place or inside the top third of EU countries. When using Actual Individual Consumption per capita, Ireland was ranked in twelfth place in the EU in 2019 but remains in the top half of EU countries.

Nevertheless, the letter in its conclusion acknowledges that Ireland is a prosperous country but that a range of measures of economic wellbeing should be considered. I wish to assure the Deputy that when assessing the position of the economy, my Department examines a wide range of economic indicators and the government will continue to pursue sensible policies aimed at ensuring sustainable growth and the well-being of all our citizens.