Zero growth in the economy

bbam

So this isn't really a supprise, really?

To my supprise GNP did grow by 4%.

Does this mean the December budget needs to be tougher since they have been presuming or even blindly hoping that GDP would grow by year end?

Does this government have an appetite to gouge even deeper risking shrinkage in the economy as a result or will our overlords force cuts through no matter what?

I don't think it looks well, it feels like the life is being squeezed out of society and the economy as it is already.

Bits_n_Bobs

No great surprise - the domestic economy is dead as a doornail. I think people have lost confidence in the present bunch of idiots in the dail and are scared witless of what's coming down the line as reform targets are not met, budget over-runs occur etc etc. Complete lack of confidence = save money = dead domestic economy

Scofflaw

Bits_n_Bobs, did you actually read the OP?

To my supprise GNP did grow by 4%.

Now, I don't know the source of that, but if that's the case the domestic economy has grown by 4%, which is very healthy.

Without a source I have my doubts about the figure, but do please read what has been said before trotting out a stock response.

correctively,
Scofflaw

Sleepy

I was sure I head on Newstalk this morning that GNP had dropped by something like 2.5%?

Dave!

http://www.newstalk.ie/2012/news/no-economic-growth-in-2nd-quarter-says-cso/

When you strip out the profits made by foreign multi-nationals and focus on the domestic economy there was growth in GNP terms by 4.6% as the period saw an increase in net exports.

But all-in-all these figures continue the trend witnessed for the past year.

That of a flat economy with little growth will make it more challenging for the government to hit its end of year targets under the EU-IMF deal which rely on economic growth.

Meanwhile the figures show that on the expenditure side of the accounts personal spending declined by 0.4% on a seasonally adjusted basis between Q1 2012 and Q2 2012.

While capital investment declined by 29.4% and government expenditure decreased by 3.9% over the same period.

CSO report

bbam

Scofflaw wrote: »

Bits_n_Bobs, did you actually read the OP?



Now, I don't know the source of that, but if that's the case the domestic economy has grown by 4%, which is very healthy.

Without a source I have my doubts about the figure, but do please read what has been said before trotting out a stock response.

correctively,
Scofflaw

Sorry was on phone earlier and big fingers make links hard work...

http://www.independent.ie/business/irish/domestic-economy-grows-sharply-in-second-quarter-cso-3235410.html

4.3% growth in GNP

Scofflaw

Sleepy wrote: »

I was sure I head on Newstalk this morning that GNP had dropped by something like 2.5%?

That was the figure for 2011.

cordially,
Scofflaw

Bits_n_Bobs

Scofflaw wrote: »

Bits_n_Bobs, did you actually read the OP?

Now, I don't know the source of that, but if that's the case the domestic economy has grown by 4%, which is very healthy.

Without a source I have my doubts about the figure, but do please read what has been said before trotting out a stock response.

correctively,
Scofflaw

my mistake, half listening to the radio, half working, half reading internets...obviously doing them all rong

spank_inferno

So that's good news then.

4.6% is quite robust (even if compared to a poor prev year).

GDP is flat year on year thoughm, which is a bit odd?
What would have caused that?
I thought the Multi-national & export sectors had been doing well?

bbam

spank_inferno wrote: »

So that's good news then.

4.6% is quite robust (even if compared to a poor prev year).

GDP is flat year on year thoughm, which is a bit odd?
What would have caused that?
I thought the Multi-national & export sectors had been doing well?

I'd say all that it would take is for one MN like Intel, who have high value exports, to have a pause or dip in their manufacturing plan and it would dip. You wouldn't believe the value of stuff they ship in a month.

kellso81

Lipitor coming off patent last December has had a big impact in Irish exports as most of the world's supply of the drug was manufactured here.

http://www.independent.ie/business/irish/patent-end-to-lipitor-led-to-91pc-decline-in-exports-3021683.html

Scofflaw

spank_inferno wrote: »

So that's good news then.

4.6% is quite robust (even if compared to a poor prev year).

GDP is flat year on year thoughm, which is a bit odd?
What would have caused that?
I thought the Multi-national & export sectors had been doing well?

It's actually a very mixed bag of news, and Bits_and_Bobs' reflex is more reasonable once you look at possible causes:

The CSO attributed the rise in GNP to multinationals retaining profits in their Irish businesses, with less money being transferred abroad.

Year-on-year GNP is up 2.3pc, while GDP is down 1.1pc.

Analysts said the numbers suggested the government could still meet its target for GDP growth of 0.7pc for the full year.

The balance of payments showed a current account surplus of €3.2bn – the highest quarterly surplus on record.

That was due mainly to a record services surplus of €1.3bn, while net income outflows were down more than €1bn on the quarter.

So, while GNP is up, and the balance of payment surplus is unalloyed good news, a chunk of the GNP rise is likely to be US companies holding profits in Ireland while they wait to see the outcome of the US Presidential race - both candidates have definite plans for corporation tax.

cordially,
Scofflaw

Bits_n_Bobs

Have the troika issued GDP growth targets or are the various plans based purely on GNP growth targets?

bbam

Haven't they based their estimates of what cuts we need to make with a built in factor of GDP growth.

Less growth = need for more cuts or more tax or both.

roro2

All IMF targets are based on GDP and their current forecast is for 0.4% growth this year. Lower GDP means that the deficit/GDP target needs more action on the deficit side. It also follows that tax revenues may come under pressure from lower personal consumption (-0.4% in the quarter), etc.

GNP isn't a great measure for Ireland due to the high number of foreign companies, and timing issues with how they move their funds around.

Taxi Drivers

Scofflaw wrote: »

Now, I don't know the source of that, but if that's the case the domestic economy has grown by 4%, which is very healthy.

Without a source I have my doubts about the figure, but do please read what has been said before trotting out a stock response.

correctively,
Scofflaw

I would have thought so too having been repeatedly told that GNP was the appropriate measure to use. This is a pretty detailed explanation of what happened.

http://economic-incentives.blogspot.ie/2012/09/whats-story-with-gnp.html

everdead.ie

I don't think it is surprising with current economic factors that the country is not really growing.

1. Increased Taxes cuts disposable income.
2. People are choosing to save and pay down loans in fear of loosing their jobs and generally being more prudent.
3. Government cuts are taking money out of the economy that was there last year.

Obviously this is all necessary to pay off our huge deficit but this is the effect it has on the economy I honestly think the fact we aren't in a recession is a credit to the economy.

lmimmfn

@Scofflaw, i have my own opinions but i would like to hear yours, Noonan said their projection for growth next year is over 2%( i think 2.3% and i dont know what this split is in terms of GDP/GNP ), seriously do you think thats realistic?

Also, would appreciate if you could explain why multinationals hoarding cash isint GDP releated as opposed to GNP related? i realise it props up the banks with local savings/bankings but is that it?