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Asset transfers to Republic lead to false dawn of 26% economic growth

By Ed Carty and Margaret Canning

Published 13/07/2016

Michael Noonan
Michael Noonan
Finance Minister Michael Noonan hailed the new figures

Official figures on the economy of the Republic of Ireland - Northern Ireland's biggest trading partner - have been branded a farce.

Ireland's Finance Minister Michael Noonan said the phenomenal growth numbers - 26.3% last year - combined with rising employment and strong consumer spending showed the signs of "real growth". The Central Statistics Office (CSO) said the numbers were down to a surge in aircraft leasing business being recorded in Ireland, a €300bn (£251bn) increase in company assets being transferred and a 200% jump in intangible assets such as patents being recorded.

But it refused to divulge the true extent of each, citing confidentiality clauses with companies. It also said multinationals were continuing to use so-called inversions to base their businesses in Ireland and reclassify balance sheets which gives the appearance of more work being done in the Republic.

And it accepted that "employment has not changed greatly as a result".

Economists lined up to dismiss the numbers, with John Simpson saying the growth figure was "misleading".

"It does represent a distortion because they were due to large capital transfers which were largely paperless, so it's not what you would term a real increase."

But he added that the Republic's strong growth - even if closer to the Central Statistics Office (CSO) original estimate of 7.8% - demonstrated the importance of establishing new terms of trade.

"Now is the time when we should be giving very serious consideration to what we can do to minimise the disruption to trade in a post-Brexit era."

Aidan Regan, assistant professor in the School of Politics and International Relations at University College Dublin, called on the Irish Government to make a public statement on the confusion created by the report.

"The 26.3% makes for a great media headline. But if the media want to go find this growth, they might as well go plane-watching at Dublin airport," he said.

"It's a farce. There is simply no credibility to the national accounts.

"Most serious observers looking in at Ireland already know this. And this is what should really concern the government and civil servants."

The CSO report for 2015 said GDP, which calculates the value of all business - including multinationals - grew by 26.3%. Gross national product (GNP) - which reflects Irish-owned companies - was up 18.7%.

Belfast Telegraph

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