Latest news with #ModifiedDomestic
Irish Post
2 days ago
- Business
- Irish Post
Irish economy grew in first quarter of year due to exporting increase ahead of US tariffs
IRELAND'S GDP increased by 9.7 per cent in the first quarter of this year new figures show. The Central Statistics Office published the Quarterly National Accounts for the first quarter of 2025 today. They show the rise in gross domestic product (GDP) which was driven by a substantial increase in goods exports as firms' rushed to export to the US ahead of the proposed higher tariff's due to be implemented by President Trump on EU goods. Finance Minister Pascal Donohoe 'I note the substantial quarterly increase in Gross Domestic Product (GDP) of 9.7 per cent in the first quarter of this year,' Finance Minister Pascal Donohoe said today. 'This was driven by a significant increase in the export of goods, and reflects, in large part, the 'front-loading' of exports in anticipation of the imposition of tariffs by the US administration,' he explained. 'This is also a feature in other countries, though the scale is much larger in Ireland. 'My officials assess this as likely to be temporary – with exports and GDP likely to moderate over the course of this year.' Elsewhere the figures show the nation's Modified Domestic Demand – which is deemed a more appropriate indicator of activity in the domestic economy – grew by 0.8 per cent relative to the previous quarter and by one per cent on an annual basis. Consumer spending grew at a pace of 2.5 per cent in the first quarter according to the report. 'Today's results highlight, once again, that GDP is not an accurate reflection of economic activity happening 'on the ground',' Minister Donohoe said. 'This is why alternative indicators, such as Modified Domestic Demand, are so important in an Irish context. 'On this basis, the domestic economy grew by 0.8 per cent in the first quarter. 'This is a more accurate reflection of developments in the domestic economy and is consistent with the strength of our labour market – with a record 2.8 million people in employment at the beginning of the year.' Mr Donohoe claims the figures confirm the 'relatively strong position of the domestic economy at the start of this year'. 'Looking ahead, however, the economic outlook has become increasingly challenging,' he added. 'Indeed, the significant increase in uncertainty is likely weighing on growth,' Mr Donohoe suggested. 'In this more challenging global environment, we must focus on policy areas where we can exert influence. "In particular, continuing to boost our competitiveness will be key to ensuring that Ireland remains an attractive place to live, work and invest – not just today, but over the long term.' See More: Economy, Exporting, GDP, Ireland, Tariffs, US
Irish Independent
06-05-2025
- Business
- Irish Independent
Irish economy will take a hit, even without Trump tariffs
In an annual report it is due to file to the European Commission, the Department of Finance downgrades its expectations for Modified Domestic Demand (MDD), regarded as the most reliable measure of economic activity in Ireland. Paschal Donohoe, the Minister for Finance, said: 'My Department expects MDD to expand by 2.5pc this year, a downward revision of almost half a percentage point from the autumn forecasts. This reflects heightened levels of uncertainty. 'Even in the absence of any further changes in tariffs, there is evidence that firms and households are adopting a 'wait-and-see' approach. In other words, they are holding off on big-ticket purchases; this is also a feature in other economies.' These forecasts were produced at the end of March on the assumption that transatlantic tariffs would not be introduced. 'We have included an alternative scenario which assesses the potential impacts for the Irish economy under the current tariff landscape,' Mr Donohoe said. 'In this alternative scenario, the level of domestic economic activity is around 1.5 percentage points below the no-tariff baseline by end-2026.' The current scenario is a 10pc tariff on Irish exports to America, with exemptions for some sectors, including pharma. If that remains, the projection is that MDD will grow by 2.5pc this year and by 1.75pc next year. The Exchequer returns published today show a surplus of €2.8bn to the end of April. Overall spending was €33.1bn, in line with the amount profiled by departments, but an increase of almost 10pc on this time last year. Olivia Lynch, Head of Tax Markets at KPMG, said: 'Income tax was the top performer in April with receipts of €3.5bn, up 7.5pc compared to April 2024. This growth is reflective of a buoyant Irish labour market operating at full employment. 'Cumulative tax receipts for the year to date are 8.3pc ahead, demonstrating continued strength and resilience in the economy. April typically sees lower activity in Corporation Tax receipts. All eyes will be on May which is a better gauge of economic activity as it is one of the key months for corporation tax payments. 'The coming months will be crucial to see whether Irish tax yields remain stable amidst the global economic uncertainty.'
