This piece from today’s Financial Times (Lex section) points out that Ireland’s technical exit from recession looks less glamorous when GNP figures are considered. I’m trying to upload a scan of the paper article: is that possible?
ft.com/cms/s/3/669140b0-93f7-11df-83ad-00144feab49a.html
(Behind a paywall, however…)
Ireland is out of recession – gross domestic product grew 2.7 per cent in the first quarter. But a more accurate measure of Irish economic performance – because of the high level of multinational profits exported – is gross national product. The Economic and Social Research Institute forecasts GNP will shrink 0.5 per cent this year after declines of 10.7 per cent in 2009 and 3.5 per cent in 2008. The debt to GDP ratio is also set to climb to 87 per cent by the end of 2010, above the eurozone average of 85 per cent. As governments around Europe contemplate austerity measures, Ireland offers a not terribly encouraging exampe of how difficult it is to overcome a massive debt binge.
There was plenty made of this (here and in the press) when the GDP/GNP figs were announced… -0.7% GNP if I recall.
Here’s a link to one of Mr Hennigan’s pieces:
Irish GDP will expand 0.6% in 2010 and GNP will contract 0.5%
It’s from Jan 10 but the point remains the same.
ETA:
State agency Forfás says Gross National Product (GNP) is a better measure than GDP of the value added accruing to residents of the country. In Ireland, GNP is now considerably lower than GDP because of income flows to non-residents, especially profits and dividends of foreign direct investment enterprises. GNP is about 85% of the value of GDP. In 1970, the reverse was the case with GNP higher, because of income flows to Irish residents from abroad. As a result of this turnaround, GNP growth has been somewhat slower than GDP growth. Since 1970, real GNP has increased about four times. In the most recent year 2008, GNP decreased by 2.8% while in the five years (2003-2008) it increased by an average annual rate of 3.8%.
