Paul Nicholas Gogarty
Question:112 Mr. Gogarty asked the Minister for Finance the concerns he has in relation to the growing divergence between gross national product and gross domestic product as comparable economic indicators. [14676/03]
Written Answers. - Economic Performance.
GDP measures the level of economic output in Ireland, including the activity of foreign owned multinationals operating here. GNP measures the level of income accruing to Irish residents, including income generated by Irish companies operating abroad. Preliminary CSO estimates for 2002 show GDP growing at 6.3%, and GNP by 0.6%. Neither measure gives a complete picture of domestic economic activity in Ireland. For instance, GDP can overstate the level of economic activity in Ireland, where foreign multinationals' profits are concerned. In 2002, those profits were substantial. This investment has been instrumental in producing high rates of growth in the Irish economy in both GDP and GNP terms and thus high levels of job creation. On the other hand, the level of GNP can be lower than otherwise if profits earned by Irish companies operating abroad are less than expected. The gap between GDP and GNP is one indication of our success in attracting foreign direct investment to this country.
Ruairí Quinn
Question:113 Mr. Quinn asked the Minister for Finance the latest figures available to his Department on the level of economic growth for 2003 and the projected level for 2003. [14652/03]
The most recent economic forecasts published by my Department were those published on budget day. They included growth rates for 2003 of 3.5% for GDP and 2.2% for GNP. The forecasts were based on the assumption of a pick-up in the international economy in 2003. These budget day forecasts were made at a time when the international economic outlook – critical to the progress of a small open economy such as Ireland – was characterised by a high degree of uncertainty. The continued international slow-down is the most significant factor influencing the pace of domestic growth. Considerable uncertainty remains about the timing and pace of the global recovery. Preliminary CSO estimates for 2002 show GDP growing at 6.3%, and GNP by 0.6%. This indicates the economy entered 2003 with little momentum in GNP terms. The challenge, given the current circumstances, is to pursue the correct policies and, in particular, to safeguard Ireland's competitiveness to ensure that we will be well-placed to take advantage of the international recovery when it occurs. My Department will publish an updated forecast for economic growth in the Economic Review and Outlook which is usually available in August. It is not normal practice to publish any revised economic estimates until then.