Abstract
IRELAND
IRELAND
2015 ARTICLE IV CONSULTATION—SUPPLEMENTARY INFORMATION
March 19, 2015
Prepared By
European Department
This supplement provides information that has become available since the issuance of the staff report on March 10, 2015. The information does not alter the thrust of the staff appraisal.
National accounts data for Q4 confirm the strong growth in 2014. Preliminary data for GDP in 2014 indicate growth of 4.8 percent y/y, consistent with staff projections. Final domestic demand and net exports made similar contributions to growth, of just over 2 percentage points. With net factor income payments to nonresidents rising by 2.7 percent, Gross National Product recorded a 5.2 percent increase on the year.
Real GDP growth in 2014
(Percentage change unless indicated otherwise)
Real GDP growth in 2014
(Percentage change unless indicated otherwise)
| Staff Proj. | Actual Prel. | ||
|---|---|---|---|
| Real GDP | 4.8 | 4.8 | |
| Final domestic demand | 3.8 | 2.9 | |
| Private consumption | 0.8 | 1.1 | |
| Public consumption | 6.7 | 0.1 | |
| Fixed investment | 10.0 | 11.3 | |
| Change in stocks (contribution to growth) | 0.1 | 0.5 | |
| Net exports (contribution to growth) | 1.9 | 2.2 | |
| Exports | 8.0 | 12.6 | |
| Imports | 7.8 | 13.2 | |
Real GDP growth in 2014
(Percentage change unless indicated otherwise)
| Staff Proj. | Actual Prel. | ||
|---|---|---|---|
| Real GDP | 4.8 | 4.8 | |
| Final domestic demand | 3.8 | 2.9 | |
| Private consumption | 0.8 | 1.1 | |
| Public consumption | 6.7 | 0.1 | |
| Fixed investment | 10.0 | 11.3 | |
| Change in stocks (contribution to growth) | 0.1 | 0.5 | |
| Net exports (contribution to growth) | 1.9 | 2.2 | |
| Exports | 8.0 | 12.6 | |
| Imports | 7.8 | 13.2 | |
The Central Statistical Office (CSO) also released a notice in relation to contract manufacturing, a topic discussed in Box 1 of the staff report. The CSO concludes that additional products made under contract manufacturing arrangements for Irish companies were not particularly significant in explaining Irish GDP growth in 2014. The information released does not permit a precise calculation of the contribution to growth in 2014 from contract manufacturing, but suggests that the upper estimate provided in the staff report, of a contribution of perhaps as much as 2 percentage points, is likely too high.
Strong tax revenues narrowed the budget deficit in early 2015. Tax revenues rose by 16 percent y/y in the first two months of 2015, exceeding the monthly profile by 5.4 percent. Revenue gains were broad-based, with strong increases in VAT and excises supported by buoyant post-Christmas retail trading, while solid rises in personal income taxes and social contributions back up signs of ongoing recovery in the labor market. Spending trends are encouraging, with voted current spending being 1 percent below profile. Excluding a postponement of capital spending (€0.2 billion on Irish Water) the general government deficit was 0.3 percent of GDP smaller than profiled, with revenues contributing two-thirds of the improvement.
Financial market conditions have benefited from the ECB’s quantitative easing. Since early March sovereign yields have fallen across the maturity spectrum. With short-term yields already close to zero, long-term yields have recorded the largest declines. The new 30-year benchmark bond issued at 2.1 percent in early February was re-opened on March 12, with €1 billion issued at the substantially lower yield of only 1.3 percent. Bank bond yields continued to decline in the wake of government benchmarks.
Bank Bond Yields
(percent)
Citation: IMF Staff Country Reports 2015, 077; 10.5089/9781475531527.002.A003
Source: Bloomberg.Bank Bond Yields
(percent)
Citation: IMF Staff Country Reports 2015, 077; 10.5089/9781475531527.002.A003
Source: Bloomberg.Bank Bond Yields
(percent)
Citation: IMF Staff Country Reports 2015, 077; 10.5089/9781475531527.002.A003
Source: Bloomberg.
