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Why the Covid-19 crisis may push up house prices

The publication of the Central Statistics Office’s estimates of last year’s economic growth is normally newsworthy. But when figures appeared indicating that our gross domestic product had grown by about a quarter in 2015, it generated huge headlines, not just in Ireland but across the world.

Of course, while the Irish economy performed well in 2015, it didn’t grow by anything like that scale – rather these data showed how the standard international approach to measuring output just doesn’t work for an economy as internationalised as Ireland’s. It is not easy to discern the true picture from the data.

The CSO now provides an increasing breadth of relevant statistical information which enables more precise estimation of true growth in our economy. However, some of this data is only available in late autumn, so that a complete understanding of Ireland’s economic progress in 2019 must wait until then.

The publication earlier this week of CSO’s national accounts for 2019 portrays an economy that was continuing to grow vigorously, though possibly somewhat slower than in previous years. The growth was broadly based, with all major sectors showing progress.

A rather striking growth in agricultural output of 28 per cent in 2019 partly reflects a very bad year in 2017. Less surprising, the IT and construction sectors also grew very rapidly. The data suggests that, as in previous years, the share of the growth coming from foreign multinationals was probably about 20 per cent, with most of the increase in value-added coming from Irish-owned business.

Multinational economics
When the data arrives, 2020 is likely to prove very different from last year. The first quarter’s economic figures, with two months of normal activity and March affected by lockdown, suggest that multinationals will account for a greater share of output in 2020.

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