Strong exports sees Ireland outperform rest of eurozone – CSO

THE domestic economy was hit hard by the initial impact of the Covid-19-related lockdown in the first quarter of the year. However, strong exports meant that, overall, the State still managed to comfortably outperform the rest of the eurozone, according to the Central Statistics Office.

The nation’s quarterly accounts, issued yesterday, showed gross domestic product rose by 1.2pc in the quarter and gross national product – which more accurately reflects the activity in the domestic economy – grew by 0.1pc.

Both figures were dramatically better than the performance of the rest of the eurozone, where GDP fell by 3.8pc, the sharpest decline for the bloc since the data series began in 1995.

“Net exports of goods and services increased by almost €1.9bn in the quarter, driving the increase in GDP,” said Jennifer Banim, who heads the CSO’s economics division.

“In the domestic economy, personal spending decreased by 4.7pc, reflecting the impact of the Covid-19-related restrictions that came into effect in mid-March.”

The final two weeks of March were characterised by the start of lockdown here.

The CSO noted that as the lockdown hit, online spending surged, with as much as 80pc of sales of clothing, footwear and textiles in April being carried out virtually. That was up from less than 10pc in February.

Most economists believe exports will help Ireland overcome some of the damage inflicted on the economy due to a collapse in consumer demand.

The national accounts were heavily skewed, once again, by tax shifting by multinationals of their intellectual property (IPP) assets. “The IPP imported in Quarter 1, 2020 drove the €51.4bn of capital investment in the quarter,” the CSO said.

Christopher Sibley, who heads the CSO team that analyses the balance of payments data, said that there had been similar surges in intellectual property assets in the second and fourth quarters of last year.