AIC v GDP

#1

According to Eurostat, Ireland’s Gross Domestic Product (which includes the value of all economic activity within the State) is the highest of all EU States plus Switzerland, bar Luxembourg.

However, the figure for Ireland’s Actual Individual Consumption (AIC) which calculates the actual spending power of individuals within the State is calculated as being at 95% of the European average. This puts Ireland on a par with the likes of Spain and Italy.

This might go some way toward explaining why most people in Ireland tend to be incredulous when told that they are the wealthiest people in Europe. It simply doesn’t tally with their own sensory perception, especially given that most people have by now had the opportunity to travel abroad.

https://ec.europa.eu/eurostat/documents/portlet_file_entry/2995521/2-15122020-BP-EN.pdf/cd3fcb0f-faee-d0ce-0916-9be3ac231210

Moral of the story is to ignore the lies told by politicians and their attendant ‘experts’ and to trust your own judgement. Observe with your own eyes and ears and draw your own conclusions. More often than not you will be closer to the truth.

Apply this same logic to everything that is happening currently. Trust your instincts.

#2

After the CSO changed to Eurostat methodologies about 6 years ago and during the short life of Modified GNI I found a good rule of thumb is take the official GDP divide by two and you got a fairly accurate number of the actual size of the Irish Economy.

Now what is interesting is that the old CSO sort of kept a tab on the immense capital flows through the IFSC etc, a $600B / $800B catch all item about a decade ago, but as the number has risen to a multiplier of that (I’ve seen $2.6T as one estimate) official statistics seemed to have faded away. Or maybe I have been looking in the wrong place.

So the Irish economy is basically the Cayman Islands with shite weather.

#3

“The statistical distortions created by the impact on the Irish National Accounts of the global assets and activities of a handful of large multinational corporations have now become so large as to make a mockery of conventional uses of Irish GDP.”

Patrick Honohan, ex-Governor of the Central Bank of Ireland July 2016