Prostitution and
drugs help boost
economic data

By Colm Kelpie

STRONGER than expected 
economic growth figures have been boosted in part by the inclusion of prostitution and drugs in the calculations.

The Central Statistics 
Office (CSO) said the economy grew last year by 0.2pc largely because of changes to the way research and development spending is classified in the national accounts.

But, for the first time, 
statisticians have also tried to estimate how much is spent on prostitution as well as the street value of illegal drugs. The CSO has in the past included certain illegal activities in the national accounts, including fuel smuggling and drug smuggling.


New EU rules mean statisticians have looked at narcotics to determine the street value of drugs instead of simply the wholesale value.

And they've also looked at prostitution for the first time.

The CSO estimates that more than €800m was spent on 
prostitution, drugs and smuggled goods last year.

But the bulk of the changes in the GDP data are because of the new way of classifying R&D spending by businesses.

The Immigrant Council of Ireland said the inclusion of prostitution and drugs in the accounts shows the extent of organised crime in the country.

"People will be rightfully shocked that pimps, pushers and traffickers are using criminal activity to take cash which would otherwise be spent in legitimate businesses, where it would create jobs and support the economic recovery," said chief executive Denise Charlton.The economy grew a half a percent more than initially thought with previous estimates stating it shrank by 0.3pc.


Coupled with stronger- than-expected tax revenues, it means Finance Minister 
Michael Noonan will likely have more wriggle room to cut less than thought in the Budget.


The growth figures come a day after it emerged tax 
revenues were ahead of target for the first six months of the year, buoyed by the improved jobs market.

Experts have said this gives the Government scope to have a much smaller budget in 
October, potentially halving the planned adjustment to €1bn.

Business lobby group IBEC said the economy was actually about €8bn larger last year than was originally thought. "The revised figures give the minister much more room for manoeuvre on Budget day," said IBEC economist Fergal O'Brien.

"A significantly lower 
adjustment than the envisaged €2bn will be enough to reach the required deficit target. The numbers show a 
solid broad-based recovery is