Irish GDP grew by 4.2% in the quarter and 10.5% in the year, according to the latest figures released today by the Central Statistics Office (CSO).
In the first three-quarters of the year, GDP was up 7.4% on average on the same period last year, leaving it very well placed to top the EU growth league table for the fourth year running. Meanwhile, GNP was up 11.2% in the year in the July-September period, and was 5.7% higher on average on an annual basis in the first three-quarters of 2017.
On the expenditure side of the accounts, exports increased by 4.4% in the third quarter compared with the previous quarter, which when combined with an import decrease of 10.9% meant overall net exports for the quarter increased by 63.1%.
Capital formation declined by 36.0% in the quarter. Personal consumption, which accounted for 51.7% of domestic demand in the third quarter, rose by 1.9% compared with the previous quarter while government expenditure recorded an increase of 0.7% over the same period.
Total domestic demand declined by 13.1% in the quarter. When combined with the 63.1% rise in net exports, the result was the overall increase in real GDP of over 4%. Factor income outflows were 3.4% lower in the quarter (€14,592m) compared with the April-June period, leading to an overall increase in GNP of 11.9%.
The Balance of Payments data for the third quarter showed a current account surplus of €14,488m (18.7% of GDP) as against a surplus of €1,154m (1.6% of GDP) in the third quarter of 2016.
Merrion Stockbrokers today claimed the latest set of figures have been distorted by the absence of imports of intellectual property in particular, and aircraft for leasing. Modified domestic demand, a measure aimed at removing the distortions from the multi-national side, was up 2.9% in the quarter and 9.1% in the year (including stocks). Excluding stocks, the annual rise was around 5%.
According to Merrion Stockbrokers, it is clear that all forecasts for Irish economic growth this year are way too low. Even allowing for some slowdown in the final quarter, Merrion Stockbrokers believes it now looks like GDP growth in 2017 will be around 7%.
Welcoming today's figures, Ibec 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."
He added, "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."