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Multinationals drove GDP growth of 13.6% in 2021

Gross Domestic Product (GDP) grew by 13.6% in 2021, driven by a strong upturn in multinational-dominated sectors, new CSO data shows. 

Multinational-dominated sectors grew by 20.7% in 2021, with all other sectors increasing by 4.8%.

Exports grew by 14.1% in 2021, while lower imports of Intellectual Property Products (IPP) drove a decrease of 8.3% in overall imports.

Personal consumption of goods and services, a key measure of domestic economic activity, increased by 4.6% in the year, reflecting the impact of the easing of the COVID-19 restrictions on household spending.

Modified domestic demand – a broad measure of underlying domestic activity that covers personal, government and investment spending – increased by 5.8% in 2021.

Surplus

In balance-of-payments results, a current account surplus of €60.7 billion was recorded in 2021, while the modified current account balance, which excludes globalisation effects, recorded a surplus of €26 billion, the data shows. 

For Q1 2022, the updated estimate for GDP growth is 6.3%.

The CSO’s Jennifer Banim, commented: “The easing of COVID-19-related restrictions led to higher levels of economic activity in 2021 for many of the sectors focused on the domestic market.

“Finance and insurance increased by 17.8% in the year, real-estate activities by 6.6% while the distribution, transport, hotels and restaurants sector increased by 3.8%.

“However, the construction sector contracted by 3.1%,” she said.

Globalised industry

Growth in globalised industry (excluding construction) sectors expanded by 21.4% in 2021 compared with 2020, while the information and communication sector increased by 16.1% in the year. 

Overall, multinational-dominated sector growth was 20.7% and in 2021, these sectors accounted for 53% of total value added in the economy, compared with a 49.5% share in 2020 and a 42.5% share in 2019, Banim said.

Government spending on goods and services increased by 6.5% in 2021, while personal spending on goods and services (the PCE indicator) increased by 4.6% in the year, reflecting the easing of COVID-19 related restrictions on consumer spending.

Personal spending reached €104.5 billion in 2021, a recovery when compared 2020’s €99.9 billion, but 6.8% lower than the €112.1 billion pre-pandemic level of spending in 2019.

PCE accounted for 24.7% of GDP in 2021, down from 26.8% of GDP in 2020 and 31.9% in 2019.