Friday 28 April 2017

Honohan: We need new accounts to measure economy

Former Central Bank governor Patrick Honohan Photo: John Ohle
Former Central Bank governor Patrick Honohan Photo: John Ohle
Colm Kelpie

Colm Kelpie

Former Central Bank Governor Patrick Honohan has said there may be a need for a new set of accounts measuring the Irish economy.

Mr Honohan said the impact on the national accounts of the multinational sector in Ireland had become so large as to "make a mockery" of conventional uses of GDP.

Official figures showing the Irish economy grew by a massive 26pc last year - more than three times faster than first thought - were quickly dismissed as "meaningless" and a "farce" this week.

Economists say that while growth is strong, the official figure is dramatically overinflated because it is driven primarily by the activities of Ireland's multinational and aircraft-leasing sectors.

Mr Honohan said statistical conventions should be revisited to help the interpretation of data in a world where multinationals, legally controlled from small jurisdictions such as Ireland, are moving assets around that inflate the balance sheets of those jurisdictions.

Irish Independent

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