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Domestic economy grows sharply in second quarter – CSO


Grafton Street, Dublin. Photo: Getty Images

Grafton Street, Dublin. Photo: Getty Images

Grafton Street, Dublin. Photo: Getty Images

THE domestic economy grew sharply during the second quarter of the year, new figures show, but that was mainly due to companies retaining profits rather than higher demand.

Latest figures from the Central Statistics Office (CS0) show Gross National product, a measure of the size of the economy excluding overseas companies here, grew 4.3pc.

That was ahead of market expectations.

However, gross domestic product (GDP) was flat after declining 0.7pc between January and March. Analysts had expected 1pc growth.

The CSO attributed the rise in GNP to multinationals retaining profits in their Irish businesses, with less money being transferred abroad.

Year-on-year GNP is up 2.3pc, while GDP is down 1.1pc.

Analysts said the numbers suggested the government could still meet its target for GDP growth of 0.7pc for the full year.

The balance of payments showed a current account surplus of €3.2bn – the highest quarterly surplus on record.

That was due mainly to a record services surplus of €1.3bn, while net income outflows were down more than €1bn on the quarter.

Tanaiste Eamon Gilmore said the Government is still on track to meet its economic growth targets this year following the publication of the figures.

"We have before, you know, quarterly figures can be up or they can be down. These quarterly figures keep us on track to meet the 0.7pc growth target that the Government and most commentators expect the economy to achieve by the end of the year.

"But we would like to see the economy growing faster and we would like to see more people back in employment, and that is why we are going to continue all of our efforts to encourage employment," he said.