Irish macroeconomic statistics have been heavily affected by globalisation and the activities of multinationals in recent years. I have outlined on a number of occasions the difficulties in particular with using GDP given the small and very open nature of the economy. This was most evident with the national accounts figures for 2015 (published in 2016). For these reasons, alternative measures of output produced by the CSO, such as modified Gross National Income (‘GNI*’), offer a more appropriate benchmark for economic activity.
For example, my Department uses a range of metrics to assess debt sustainability rather than solely relying on debt to GDP figures. This includes the debt to GNI* ratio. Last year, this ratio was 99 per cent whereas the GDP equivalent was substantially lower at 59 per cent. Furthermore, my Department produces an annual report on public debt which discusses these types of issues in depth. This year’s report is currently being finalised and will be published later in the year.
In relation to EU budget contributions, these are calculated by the EU Commission in line with the provisions outlined in Own Resource Decision (ORD) Regulation (2014/335) which was ratified by all Member States. There are three main sources of revenue, namely customs duties, VAT and GNI based contributions. The latter is the largest source of income for the EU and Ireland is obliged to make payments based on our share of EU GNI. This ensures that EU revenues match expenditure.
In recent years, Ireland has become a net contributor to the EU budget reflecting the growth in the economy, the overall size of the budget as well a range of other factors. This period has also been marked by a large increase in Ireland’s GNI based contribution in part due to the effects of globalisation. My Department will release a new report on our financial transactions with the EU later in the year.
