Peadar Tóibín (Meath West, Aontú)
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88. To ask the Minister for Finance if his attention has been drawn to figures showing a decline in the Irish economy in the first three months of 2023 (details supplied); and if he will make a statement on the matter. [21448/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The CSO’s early ‘flash’estimate of quarterly GDP for Ireland, released one month after the end of the relevant quarter, estimated that GDP contracted by 2.7 per cent in the first quarter of 2023 compared to the previous quarter. However, there are a number of points I would like to raise.

Firstly, as is widely acknowledged, GDP is not a useful measure of what is happening on the ground in the domestic economy. It is a volatile measure of economic activity that reflects the outsized role played by the multinational sector in the Irish economy. Production by the multinationals is notoriously volatile on a quarterly basis and can sometimes by driven by firm specific changes. Indeed there are a number of instances in recent years of quarterly declines in GDP within years when GDP grew strongly.

Furthermore, it is important to note that these are first estimates of GDP, which can often be subject to non-trivial revisions in both directions. Indeed, Ireland’s GDP growth rate for Q4 2022 was revised down from 3½ per cent in the ‘flash’release, to 0.3 per cent in the more detailed release that followed a month later.

In any event, domestic economic developments are better captured by Modified Domestic Demand (MDD) and its drivers such as consumer spending and modified investment, which are due to be published in the more detailed release early next month. The economy has proven to be remarkably resilient despite inflationary pressures. Indeed, data releases on the domestic economy in the first quarter, including in the labour market where unemployment fell in the first quarter as well as tax receipts point to a solid opening quarter.

My Department recently published updated forecasts as part of the Stability Programme Update last month. MDD is projected to grow by 2.1 this year, and by 2.5 per cent next year.