Monday, August 27, 2012

27/8/2012: Second worst in GDP growth in Q1 2012?

When on July 12 the CSO published the latest Quarterly National Accounts, the Irish media and the Government were quick to focus on the positive side of the reported data - the revised figures for Q4 2011 that Irish GDP rose 1.4% in constant prices terms y/y in 2011 compared to 2010. Fr less attention was paid to a massive 2.5% y/y fall off in GNP and even less attention still was given to Q1 2012 preliminary estimates that showed q/q contractions in GDP of 1.1% and in GNP of 1.3%. All in, the headline figure referenced was almost always the up-beat "Irish economy grew at a euro area average rate in 2011".

Now, there are many caveats that should accompany q/q figures, including:

  • Q/q changes can be volatile;
  • Preliminary figures can be subject to significant revisions in the future; etc
Keeping all of this in mind, today's data release from the OECD is discomforting. Here's the chart:

As the chart above clearly shows, excluding Greece (missing data), we are the second worst performer (after Luxembourg) in terms of GDP growth in Q1 2012 in the entire OECD.

Let's hope those future revisions come in to the significant upside.


Unknown said...

Regardless on what GDP or GNP does we are not going to out run our debt, so the question is what should we do ourselves to prepare and what should the government do to prepared for the coming reality

Anonymous said...

This report seems at odds with the surge in the Irish PMI index which has been over 50 since April 2012....

Any thoughts?

TrueEconomics said...

1) data covered in the post is Q1 2012, as clearly labeled
2) What 'Irish PMI index' do you have in mind? This:
or this

Even at 3mo MA of 52.7 through July, Irish Manufacturing PMI (best performing) is hardly 'surging' - it is above 50.0, but not statistically significantly different from 50.0.

Trend is good, but the levels of activity are still below Q1 2011: