Sunday, September 13, 2015

Ireland’s Recession/Recovery versus the EU15

The rise in Ireland’s GDP over the past two years has been remarkable. 


If we take the last quarter of 2007 as the pre-crisis starting point we see that Ireland was the worst performer in terms of GDP up to the middle of 2010 but we only had Greece through to the end of 2011.

Since the middle of 2013 Ireland’s GDP has risen rapidly and now ranks fourth in the EU15 overall performance over the past eight years with only Luxembourg (outlier?), Sweden and Germany (barely) showing better economic growth over the period.

If we just focus on the domestic components of GDP the following picture emerges.

EU Domestic Demand

This indicates that it is net exports have contributed significantly to Ireland’s high ranking in the initial GDP chart.  For domestic demand Ireland ranks 10th in the 2008-2015 period and the upward trajectory suggests that this will rise but it can be seen that the pre-crisis level of domestic demand in Q4 2007 still has not been reached.

The ranking for employment is even lower at 12th with Ireland only doing better than Portugal, Spain and Greece while there is a large gap to be closed before Ireland can overtake any of the countries ahead of us.

EU Employment

When it comes to compensation of employees Ireland is second last (though the data here is nominal rather than real).

EU Compensation of Employees

One caveat to the above is that it in nominal data and a look at the inflation data from the HICP shows that Ireland is a bit of an outlier.

EU Inflation

The gap between the Ireland(bottom) and the UK (top) indices is pretty remarkable.

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