Press Statement Quarterly National Accounts and International Accounts Q2 2024

• Gross Domestic Product (GDP) fell by 1.0% in Quarter 2 (Q2) 2024 (See Editor's Note below).

• Modified Domestic Demand (MDD), a broad measure of underlying domestic activity that covers personal, government, and investment spending, decreased by 0.5% in Q2 2024.

• Personal spending on goods and services, a key measure of domestic economic activity, grew by 1.1% in the quarter.

• Domestic sectors contracted by 1.8% in the quarter with the multinational-dominated sectors declining marginally by 0.1%.

• The Balance of Payments Current Account recorded a surplus of €35.5 billion in transactions with the rest of the world in the quarter, with a key contribution coming from the export of Intellectual Property.

Statistician's Comment

The Central Statistics Office (CSO) has today (05 September 2024) published Quarterly National Accounts and International Accounts results for Quarter 2 (Q2) 2024, following on from the Preliminary GDP Estimates for Q2 2024 issued on 29 July 2024 as a CSO Frontier Series output.

Assistant Director General with responsibility for Economic Statistics, Chris Sibley, said:

"In today's results, Gross Domestic Product (GDP) is estimated to have fallen by 1.0% in April, May, and June (Q2) 2024.

The globalised Industry sector fell by 0.7% in Q2 2024 compared with Q1 2024 while the Information & Communication sector posted a decrease of 0.9% over the same period. Overall, the combined multinational-dominated elements of the Industry and Information & Communication sectors declined by 0.1% in the quarter. These sectors accounted for 43.9% of total value added in the economy, compared with a 56.1% share for all other sectors.

Domestic Economy

There was a mixed picture for sectors focused on the domestic market, with overall activity falling 1.8% for the sectors combined. The Finance & Insurance sector contracted by 9.8% in the quarter while the Professional, Administrative & Support sector fell by 2.9% compared with Q1 2024. The Distribution, Transport, Hotels & Restaurants sector declined by 1.1% in Q2 2024 compared with Q1 2024 with the Arts & Entertainment sector down by 10.1% quarter-on-quarter. The domestic facing Agriculture, Forestry & Fishing sector decreased by 2.3% in Q2 while Construction fell by 1.0% over the same period. The Real Estate sector posted a modest increase of 0.9% in Q2 2024 quarter-on-quarter while the Public Administration, Education & Health sector grew by 0.8%.

Expenditure in the Economy

Looking at expenditure, investment in capital formation fell by 65.1% or €15.5 billion compared with the previous quarter reflecting a significant export of Intellectual Property (IP) arising from global corporate restructuring in the multinational sector. Net exports of Goods & Services rose by 32.5% in Q2 2024 or by €15.1 billion. Personal spending on goods and services (the Personal Consumption Expenditures or PCE indicator) increased by 1.1% in the quarter while Government spending on goods and services rose by 1.5% in Q2 2024.

Impact of Globalisation and the Indicators of Underlying Domestic Activity

Final Domestic Demand (FDD), a measure of personal, government, and investment spending, decreased by 20.5% in Q2 2024, compared with Q1 2024, reflecting the reduction in investment or export of IP in the quarter. In Q2 2024, the Modified Domestic Demand (MDD) indicator fell by 0.5%. MDD is an important measure of underlying demand and excludes Intellectual Property Products (IPP) and aircraft leasing-related globalisation effects from the standard Final Domestic Demand measure.

International Accounts

In the International Accounts, the Current Account of the Balance of Payments recorded a surplus of €35.5 billion in flows with the rest of the world in Q2 2024, an improvement of €24.1 billion compared with the surplus of €11.3 billion recorded in Q2 2023. The Merchandise balance improved by €3.7 billion in Q2 2024 compared with the same quarter in 2023 while the Services balance improved by €17.3 billion. Net outflows of multinational profits were €22.9 billion in the quarter, a decrease of €3.6 billion on the net outflows recorded in Q2 2023 (which improves the Current Account balance).

Today's International Accounts publication includes a table of Current Account transactions with the UK. The results show a surplus of €2.6 billion for Trade in Goods & Services with the UK in Q2 2024, up €0.2 billion on the Q2 2023 trade balance. The trade surplus in Q2 2024 was offset by a deficit of €9.5 billion for net income flows, giving an overall Current Account deficit with the UK of €7.0 billion in the quarter."

Results for the first half of 2023

Analysing the period from January to June 2024, National Accounts Statistician Gordon Cavanagh commented:

"Results for the first half of 2024 (H1 2024) compared with the equivalent period of 2023 show GDP contracting by 4.4%. Factor income outflows were €13.1 billion lower than in H1 2023, leading to an overall increase in GNP of 1.4% for the first six months of 2024 compared with the equivalent six months of 2023.

In the globalised sectors, there was a mixed picture. The Industry sector contracted by 16.9% in H1 2024 compared with H1 2023 while expansion continued in the Information & Communication sector, which was up by 3.5% over the same period. Certain sectors focused on the domestic market also experienced continued growth with Distribution, Transport, Hotels & Restaurants and the Public Administration, Education & Health sector both increasing by 3.7% in H1, with Professional & Administrative Services rising 2.3% over the six-month period compared with the equivalent period of 2023. Real Estate Activities were up 1.6% in the first half of 2024 compared with the same period of 2023. However, contractions were recorded in H1 2024 in Finance & Insurance (11.9%), Agriculture, Forestry & Fishing (8.2%), Construction (5.3%), and Arts & Entertainment (0.7%).

First-Half Expenditure in the Economy

Net Exports rose by 10.6% over the period compared with H1 2024 or €10.1 billion in monetary terms. The 8.6% increase in Exports in the first half of the year compared with the same period in 2023 outpaced the growth in Imports of 7.8%. Capital Investment contracted by 41.1% in H1 2024 compared with the same period of 2023 while Personal spending (PCE) rose by 1.9%. Government spending on Goods & Services increased by 3.5% in H1 2024 compared with H1 2023. Final Domestic Demand decreased by 10.6% in H1 2024 compared with the equivalent period of 2023 as a result of the significant fall in Investment while the MDD indicator grew by 1.9% in the same period."

Editor's Note

The updated estimated GDP figure for Q2 2024 fell by 1.0%. This compares with a Preliminary GDP Estimate published on 29 July 2024 that indicated an increase of 1.2% for the quarter. The reason for the revision is that the updated GDP estimate for Q2 2024 indicating the 1.0% contraction is based on both Expenditure and Output data, while the Preliminary estimate was based predominantly on economic Output data. Preliminary estimates are published under the CSO Frontier Series which may use new compilation processes which are under development and / or new or more timely data sources and therefore the results may be subject to revision over time. Publishing outputs under the Preliminary Estimate allows the CSO to provide useful new information to users and receive informed feedback on these new methods and outputs whilst at the same time making sure that the limitations are well explained and understood. A list of our CSO Frontier Outputs is available.

Contacts