22/02/23

IRELAND: Jurisdiction tops OECD growth charts in final quarter of 2022.

As published on irishtimes.com, Tuesday 21 February, 2023.

Ireland recorded the strongest level of economic growth in the industrialised bloc of OECD countries in the final quarter of last year, according to provisional estimates from the Paris-based agency.

While growth as a whole across the Organisation for Economic Co-operation and Development (OECD) remained weak at 0.3 per cent with high inflation and rising interest rates dampening activity, the agency noted that Ireland had the strongest GDP (gross domestic product) growth of 3.5 per cent.

The stronger-than-expected growth, reported by Central Statistics Office (CSO) last month, prevented the euro zone economy from stagnating. It also meant that Ireland’s GDP growth for 2022 as a whole was 12.2 per cent, more than treble the EU average.

Central Bank governor Gabriel Makhlouf this week defended Ireland’s turbocharged growth numbers against accusations they were artificial and the product of big US companies taking advantage of Dublin’s low taxes.

Mr Makhlouf told the Financial Times that much of Ireland’s growth comes from “real factories with real people” even if a lot of activity stems from big technology and pharmaceutical groups.

The latest OECD estimates of annual GDP growth indicate that GDP continued to grow in the OECD in 2022 (2.9 per cent), but at a more moderate pace than in 2021 (5.7 per cent) when economies were recovering from the immediate impact of the Covid-19 pandemic.

The figures paint a “mixed picture” of industrialised economies. On the one hand growth turned negative in Germany and Italy (-0.2 per cent and -0.1 per cent respectively) and slowed to just 0.4 per cent in Canada, to 0.1 per cent in France and to 0.7 per cent in the United States.

On the other hand GDP grew by 0.2 per cent in Japan following a contraction of 0.3 per cent in Q3 2022, and was flat in the UK following a contraction of 0.2 per cent in the previous quarter

“Volatile movements in international trade continued to have a substantial effect,” the OECD said.

Of the OECD countries closest to the war in Ukraine, GDP contracted in Poland in Q4 2022 (-2.4 per cent), the strongest contraction in OECD countries for which data is available.

GDP also contracted in Lithuania (-1.7 per cent) and in Hungary, although at a slower pace (-0.4 per cent in Q4 2022, compared with -0.7 per cent in the third quarter). On the other hand growth remained steady in the Slovak Republic.