Ibec, the group that represents Irish business, welcomed the National Accounts figures published today by the CSO as further evidence that the Irish economy is in strong shape as it faces into major external uncertainty. The economy is now on track to grow by well in excess of 5% this year, despite some quarterly volatility.
Head of Tax and Fiscal Policy Gerard Brady said: “Ireland is now in a period of economic expansion which is amongst the most impressive in its history. Whilst previous periods of rapid growth were driven by once-off increases in the labour force in the 1990s and unsustainable credit flows in the 2000s, the current phase of growth is exceptional in that it is clearly driven by sustainable and impressive expansion in both private sector employment and business investment. The data released today show that, excluding aircraft leasing, Irish business continues to invest almost €1 billion per month in plant, machinery and capital equipment. This will underpin sustainable growth in future years.
“In addition, the consumer economy is picking up. We expect employment has increased by almost 55,000 in 2017 and recent figures showed that real wages for Irish workers are growing at 1.8%, the fastest of any EU15 country and four times the EU average. As a result, consumer spending rose by 2.7% in Q3 on an annual basis.
“Some of the volatility in today’s figures (with GDP in Q3 rising by over 10% annually) is not unexpected given our globalised business model. Ireland has been one of the big winners from the OECD Base Erosion Profit Shifting (BEPS) process which has resulted in significant corporate restructuring globally in order to align profit with substance. The first step in that process has been structural shift of intellectual property (IP) into Ireland. Today’s figures show that we are now beginning to see Ireland collect royalty payments on that IP rather than pay it out as has been the traditional route. If managed correctly, this could not only mean more tax in the future for the Irish state but also greater employment as corporates continue to align valuable IP management and R&D structures with their balance sheet position.”