Economy Contracts 12.1% in Q1; Domestic Demand Rises 0.6%

Ireland's economy contracted by 12.1 per cent in the first quarter compared to the previous three-month period, according to new data from the Central Statistics Office (CSO). This updated figure is significantly lower than the preliminary gross domestic product (GDP) estimate of a 2 per cent drop released in April. The CSO stated the revised estimate incorporates both expenditure and output data, unlike the preliminary figure which primarily relied on economic output.

Gross national product (GNP), which excludes multinational profits, increased by 1.5 per cent, driven by a 52.1 per cent fall in factor income outflows. GDP was negatively impacted by a 35 per cent contraction in the globalised industry sector and a 2 per cent decrease in the information and communication sector during January-March. Overall, the multinational-dominated sector fell by 27.1 per cent.

Conversely, the domestic economy showed growth. Modified domestic demand, excluding intellectual property and aircraft-related globalisation effects, rose by 0.6 per cent, fueled by a 0.6 per cent increase in personal spending. The non-multinational-dominated sector grew by 0.4 per cent, with professional, administrative, and support services up 1.5 per cent, and construction up 1.2 per cent. However, financial and insurance activities decreased by 5.6 per cent, and arts and entertainment fell by 4.4 per cent.

Exports declined by 7 per cent, while imports rose by 4.2 per cent, leading to a 39.8 per cent decrease in net exports. Capital investment increased by 13.8 per cent, or €4.3 billion. Government spending on goods and services rose by 0.5 per cent, and final domestic demand increased by 0.1 per cent. Compensation of employees decreased by 3.1 per cent.