High Irish GDP is an illusion, Ireland is not that rich

orangerhyme

https://www.boards.ie/discussion/comment/121290958#Comment_121290958

A quick glance at this map tells you it's nonsense.

It puts us below Romania, Lithuania, Slovenia and Cyprus and almost equal to Spain, Portugal and Poland.

I think lots of Irish people are naturally miserly. Particularly our parents generation and from a rural background.

Italians and French spend a lot on clothes and luxury goods and food.

blanch152

https://www.boards.ie/discussion/comment/121291024#Comment_121291024

Oh I agree, I was giving some reasons as to why it wasn't picking up Irish consumption.

orangerhyme

https://www.boards.ie/discussion/comment/121291065#Comment_121291065

I don't think we're big consumer spenders anyway. I know we probably spend lots on drink.

I know lots of people on good salaries and they live very cheaply. Irish people who buy clothes in Penny's and bring packed lunches. Don't eat out or drink much. Don't have a car. Have cheap hobbies like sport and hiking and cycling and surfing etc. I know indian people in IT who live on basically €20 a week on food and that's it. They don't drink and eat Dhal most days.

Lots of farmers live very cheaply also.

We're not big on fashion or cars or luxury goods or even eating out. Our parents generation were penny pinchers.

We probably spend lots on holidays so that money goes abroad.

I wonder where all the money on rent and housing goes. Does most of it stay in the country or does a big chunk go to foreign investors like pension funds?

It would be great if the LDA got going at scale and they reinvest the money into more social/affordable/cost rental etc.

blanch152

https://www.boards.ie/discussion/comment/121291123#Comment_121291123

Very true, when I paid my mortgage off some years back, I didn't change a thing about personal consumption, except more foreign holidays, using the saving.

orangerhyme

https://www.boards.ie/discussion/comment/121291166#Comment_121291166

The high streets in Italy, France, Germany and even Spain have lots of luxury goods stores.

For example Konigsgalee in Dusseldorf has Prada, Gucci, Fendi, Dior, Chanel, Luis Vuitton, Hermes, Versace.

Via Mont Napoleone in Milan is the same. Full of designer and luxury shops.

We might have comparable wealth but will never have a street like that.

We still don't have that and didn't even have it at the height of the Celtic Tiger.

Italians will spend hundreds on sunglasses and lingerie and clothes etc.

I think we're still psychologically poor even though we've nearly the highest salaries in Europe.

I'd like to see renewed energy and investment towards deprived communities.

People are born with so much potential but it's easy to go off track.

Also big investment in renewable energy and housing would be great.

Charles Babbage

https://www.boards.ie/discussion/comment/121290958#Comment_121290958

Yes, but there are 9million+ incoming visitors as well, paying Irish prices. Trade with Ni is both ways, as there are no great price imbalances. Online purchases in UK attracting Irish vat should really be counted as Irish consumption. I wouldn't say that these things hugely affect the values. Perhaps there is some remittance of money by immigrants working here, so that consumption takes place elsewhere.

In relation to the comments about the Irish not being big spenders, in 2007 we spent money we did not have, perhaps now we do not spend everything. On balance, this is an improvement.

maninasia

It's interesting I also noticed that in Ireland there aren't many display of ostentatious wealth. Yes you have folks buying SUVs but that is not much compared to the Ferraris and Lamburgihis I would see in Asia.

I think this is because there is not a big SME business owner class in Ireland compares to industrial manufacturing countries such as Germany, Italy, Taiwan etc.

In those places you have families earning millions a year and they have a lot of disposable incomes. There could be two or three generations already running the same business over 30, 50 years or even a 100 years. The second generation tend to have a habit of spending more than the founders and owners.

In financial centers such as London and NYC you get the bankers and brokers and lawyers who also earn mega money .

Last factor that should be considered is the population, we have a small population compared to many countries so luxury shopping streets won't be so big .

But I did notice a lack of high end and newer shopping malls in Dublin also. So there is probably some lack of investment due the crash that has affected things and now cost of living crisis .

orangerhyme

https://www.boards.ie/discussion/comment/121293025#Comment_121293025

I think we're just a nation of penny pinchers who were raised by penny pinchers.

I don't think we put huge value on materialistic things anyway.

Being good craic and storytellers and jokers seems to be our form of "status".

We are gradually changing though. Eating out was a luxury in the 80s and 90s but now it's normal.

We also don't have lots of "old money".

Lots of people I know who would consider themselves "middle class" but are the first generation in their family to go to University.

These old European countries have families with centuries of wealth.

In theory Dublin and it's hinterland should have the population and money to support one of those designer/luxury goods streets like other European capitals but I don't think it'll happen now.

Free 3rd level education came in 96/97 so the kids in college now are the first generation whose parents went to University, if that makes sense.

maninasia

You ignored the small and medium business factor, it's not old money really, just last few generations where countries industrialized rapidly and exported goods.

Ireland never built a strong SME industrial base. Now our wealthy are almost all salaried workers working for multinationals , civil servants and Public workers who saved over decades and invested in properties or contractors or professionals like solicitors and doctors and accountants , not business owners . They make good money in the 100,000s but pay a lot of income tax on it.

Of course we have wealthy business owners but due to the structure of society and the size of the country really not very many .

orangerhyme

https://www.boards.ie/discussion/comment/121293074#Comment_121293074

In Germany they're called Mittelstand and they're the backbone of their economy.

You're correct though. I think in the postwar era Europe produced a lot of these SME businesses with the huge economic and technological growth.

We don't have too many.

We're very reliant on FDI and multinationals in areas like IT, Pharma, Medical devices.

We probably have a few SMEs now in food production and IT.

We used have a lot of small and medium sized property developers and builders but loads of them went bankrupt in 08. I wonder what happened to them.

These would be a few men as directors normally brothers and sons with employees and contractors underneath. These built all the shopping centres and housing estates in the Celtic Tiger era.

But these old European countries have real wealthy families going back centuries.

I'm not sure how many we have. The Guinness family I guess.

I think the future is bright for us. Even Germany's economy is faltering a little.

I wonder if self-driving cars will impact countries like Germany, Italy and France who have big automotive industries as I think car ownership will fall off a cliff in maybe 10 years.

maninasia

First and second generation of college students yes. Free secondary school came in the 60s and many started going to college in the 70s then and 80s. Yup.

techman1

https://www.boards.ie/discussion/comment/121293088#Comment_121293088

if we don't have all this conspicuous consumption like our peers how are we at the top of the european carbon emmitters per head of population that we are always hearing. Something does not add up , the statistics show that we consume less than our peers and you are agreeing with this now. When I look at the sectors that produce the most Carbon in the big industrial countries They all have Transport as being their top emmitters. Ireland is unique in having agriculture as its top emmitter. Obviously they all have large agriculture industries too but their large populations consume this so it is not significant in carbon emmissions. However the UK and Germany consume large quantities of irish agricultural output but ireland gets loaded with the carbon emmissions for this. This is highly unfair and should never have been signed up to by Ireland for this reason.

Sam Russell

We get hit for the emissions from oil we import, and for the dairy products we export.

That is at least unfair.

Podge_irl

https://www.boards.ie/discussion/comment/121293764#Comment_121293764

We get hit for emissions where they are created and released. It's perfectly logical. Upstream emissions for oil products are recorded where the oil is extracted and refined.

Podge_irl

Ireland had plenty of conspicuous consumption and displays of affluence in the early 2000s. It was, however, a very new effect and I'd say the sudden impact of the GFC afterwards has made people pretty slow to re-embrace it.

McGiver

So is the conclusion that:

1. Irish folks are misers (just like the Scottish 😊)
2. Luxury consumerism not common or provided for (not many opportunities for it)
3. Small wealthy class
4. Consumption is exported through spending abroad, in NI and/or UK Amazon

I'd argue #4 (holidays+online) applies for most EU countries in the upper half of the table and I'd say it's at least partially included in the AIC.

orangerhyme

https://www.boards.ie/discussion/comment/121294853#Comment_121294853

https://www.cso.ie/en/releasesandpublications/in/aic/actualindividualconsumption-aninternationalcomparisonfor2022/

This page is quite good by the CSO.

Our AIC per capita is actually very high, 5th in the EU, which is what I'd expect.

It's when it's divided by PPS that we drop down to 14th.

We peaked at 5th in 2006.

It's difficult to explain but I do think we've lots of penny pinchers.

I know a landlord and landlady couple in Dublin who own lots of houses in the nice parts of Dublin like Ballsbridge, Sandymount etc and they spend nothing. Eat out in a pub once a week on a Sunday. Don't drink. Drive a small reliable old car. Spend a couple weeks abroad every year in an apartment they own.

They could be worth 5 or 10 million easy. Maybe some of their money is tied up in mortgages but their wealth is rising maybe 10% minimum a year.

They're from the pre Celtic tiger generation. Bought properties in the 70s and 80s and 90s.

I don't begrudge them their wealth cos they earned it.

One of them still works a full time job. They could easily retire to the south of France and drive a Ferrari if they wanted to.

Charles Babbage

https://www.boards.ie/discussion/comment/121294703#Comment_121294703

Nothing logical about it. It is the consumption that creates the need for production and the emission should be attributed to the consumer. It make sense for countries to trade agricultural goods based on comparative advantage, and bizarre calculations should not inhibit this.

Mr. teddywinkles

Deleted

McGiver

https://www.boards.ie/discussion/comment/121294911#Comment_121294911

So it confirms what I said - high absolute level of income brought down by the very high price level here (PPP) i.e. what you can actually buy for that money. The reverse works for the likes of Romania. Saying that Bucharest is in the top 10 EU regions by GDP per capita PPP, so are Prague and Bratislava, just FYI. EDIT: Prague 5th, Bucharest 12th, Bratislava 19th.

I think another factor which lowers the AIC here and increases elsewhere is government spending.

As noted at the CSO page:

General government purchases of goods and services from market producers that are supplied to households as social transfers in kind, for example, the services provided by GPs to medical card holders.

In addition to the above, AIC measures:

4. General government social transfers in kind that are non-market produced, for example, primary school education expenditure.

Investment into "free" healthcare, education and other public services is higher in most of other EU countries. As I said Irish government runs on a lean budget (supported by relatively low taxes).

Podge_irl

https://www.boards.ie/discussion/comment/121296888#Comment_121296888

It's perfectly logical - that doesn't mean you have to agree with it. But the logic is sound and consistent - emissions are calculated at the point of release.

There are pros and cons to the different methods for calculating this. I, personally, don't think we should be incentivising a country to run coal plants to power factories to send manufactured goods abroad because they don't need to worry about the emissions

Charles Babbage

https://www.boards.ie/discussion/comment/121297418#Comment_121297418

It is perverse. It could lead to each country having a mixed agriculture and inhibit trade, leading to higher emissions overall It is shameful that the Irish government are putting up with this perversity.

Podge_irl

https://www.boards.ie/discussion/comment/121297707#Comment_121297707

Again, it is no different to manufacturing emissions being counted in the country of production. I don't know why agriculture should be so uniquely different.

Charles Babbage

https://www.boards.ie/discussion/comment/121297754#Comment_121297754

There might well be a case for emissions intensity to be included in manufacturing trade also, otherwise a place with high consumption and no manufacturing could do what they like.

techman1

Investment into "free" healthcare, education and other public services is higher in most of other EU countries. As I said Irish government runs on a lean budget (supported by relatively low taxes).

the numbers dont bear that out for example in comparison to UK, the UK total government expenditure per capita is 17200euros

thats £1040 billion (total uk government expenditure) divided by 67 million converted to euros gives 17200 euros

in Ireland the figure is 21200 euros per capita

thats 106 billion euros (total irish government expenditure) divided by 5 million.

So the irish government spends 4000 euros more per capita than the UK does therefore the irish government is way over funded and wasteful and thats a primary reason why everything costs much more in Ireland because the state sector is too big. Of course the CSO and ESRI being government funded are never going to do statistics like I have roughly produced above

blanch152

https://www.boards.ie/discussion/comment/121294853#Comment_121294853

4 doesn't apply to most of the countries. In larger countries, people holiday at home, increasing domestic consumption, in countries like Romania etc., they can't afford to travel abroad.

McGiver

https://www.boards.ie/discussion/comment/121303603#Comment_121303603

To some extent. But I disagree they are so poor (they're not). They can travel to neighbouring countries, Bulgaria or Turkey in Romanian case etc.

SuperBowserWorld

These two were smiling on budget day like the cats that just got the cream ... End of September...

Now corporation tax is down 45% in October and they look worried.

Mystic Meg economy 😁

Charles Babbage

https://www.boards.ie/discussion/comment/121321174#Comment_121321174

I'd say they are nearly glad. Corporation tax was always bound to vary a bit, but when it was high everyone was calling for expenditure on everything. The experts said that the corporation tax was not going to stay at that high level and now there is evidence of that, which allows them hold the line on expenditure better.

UsBus

Once corporation tax starts falling here, you'd feel it will be very difficult it get it back again. Larger countries turning the screw on corporations to pay tax where it applies. I can see a queue of politicians stepping away from the next election if we look to be heading into a very uncertain period for the country.