EU rules putting focus on illegal activities
Q What's all this talk about sex, drugs and R&D?
It's hard to believe that sex and gross domestic product would ever make it into the same sentence, but essentially the Central Statistics Office (CSO) announced yesterday that certain illegal activities, including prostitution, are now being included in the national accounts.
Spending by big foreign companies on research and development is also being booked differently. As a result, the economy grew by 0.2pc last year, and didn't shrink by 0.3pc as initially thought.
Q This is pathetic. Are you telling me the economy is in such bad shape that the Government has resorted to including illegal activities to try and skew the figures?
No, it's all come about because of new EU rules that state these areas must be examined and taken note of within a country's economy. The CSO had already looked at certain illegal activities, such as fuel smuggling and drug smuggling. Now they're trying to look a bit closer at not only the wholesale value of drugs, but the street value as well. But they've never looked at prostitution before. This is a first.
Q How can they measure prostitution?
They're being a little tight-lipped about that. The CSO said it has spoken to people "who would be aware of these activities" and also claimed certain criteria has been drawn up across Europe to help quantify it.
Q So was there a surge in growth last year as a result of these revisions?
While growth was better than thought, revisions have also been made to previous years, which means the rate of growth is unchanged.
Q If the economy was bigger last year than thought, does that mean we still need to do as tough a Budget?
Hopefully not. And the figures certainly suggest that it's increasingly unlikely. Experts claim that GDP was about €174.8bn last year, where it was previously thought to be around €164bn. If you add the better-than-expected tax receipts received for the first six months of 2014, there's scope there for doing less.
Q How much less? That hasn't been answered yet, but some experts have speculated it could be halved to about €1bn.