Monday 16 January 2017

Latest GDP figures will be closely watched as October Budget looms

Published 07/09/2015 | 02:30

There has been a number of impressive economic reports recently, including last Wednesday's exchequer returns which showed the taxman collected over half a billion more in tax in August than expected, with large gains recorded in income tax, VAT and corporation tax.
There has been a number of impressive economic reports recently, including last Wednesday's exchequer returns which showed the taxman collected over half a billion more in tax in August than expected, with large gains recorded in income tax, VAT and corporation tax.

There's a mix of economic data due over the coming days, but arguably the most important will be the latest GDP figures for the second quarter due on Thursday.

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Analysts expect that the strong growth enjoyed in the first three months of the year, as well as last year, will have continued into the second quarter.

All the evidence suggests this to be the case.

There has been a number of impressive economic reports recently, including last Wednesday's exchequer returns which showed the taxman collected over half a billion more in tax in August than expected, with large gains recorded in income tax, VAT and corporation tax.

The State has collected about €1.4bn more than forecast so far this year, meaning the take for the year could end up close to €2bn healthier than thought in last October's Budget.

In theory, the extra cash could give the Government even more wriggle room to play around with in Budget 2016 - the last before the general election - but also make it politically more difficult to dampen expectations. Data released earlier in the year shows that the overall size of the economy has now exceeded the pre-crash peak of 2007, although population growth means economic activity per head remains less than it was in the boom.

The economy grew by 1.4pc in the first three months of this year, based on the GDP measure that includes sales by multinationals based here, although it shrank slightly looking at the domestic economy alone.

Last year, GDP increased by 5.2pc, significantly more than initially thought, the CSO said. It was enough to take the overall economy back to the previous peak in 2007.

Economic growth is the highest among our European peers, including the UK, and more than three times the EU average. Given that we're just over a month until Budget 2016, the latest GDP data will be closely watched.

Also this week will be releases on inflation and trade. On corporate news, Green REIT has results today for the year to the end of June, while Air France-KLM group will have traffic statistics out on Wednesday.

Dalata Hotel Group is reporting half-year results on Wednesday.

Elsewhere, Bank of England policy makers are forecast to leave the benchmark UK interest rate at a record-low 0.5pc, where it has remained for more than six years, when they meet this week.

Minutes of the meeting, released at the same time on Thursday, will show how many of the nine policy makers voted to increase borrowing costs.

US consumer confidence was probably restrained at the start of September amid recent stock-market turbulence, data due this week will show.

Apple is expected to unveil its latest smartphone, with a look similar to the current iPhone 6 model, a better camera and faster processor.

Brazil, Canada, Malaysia, Russia and South Korea are to set interest rates.

And, although nothing to do with the economy, the US Open nears its conclusion as Serena Williams seeks a Grand Slam, making her the first person to win all four tennis majors in a calendar year since Steffi Graf in 1988.

That's just for the tennis buffs among you.

Irish Independent

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