Economy sizzles to its peak

By Andrew Bushe

DUBLIN — The economy grew by a sizzling 11.5 percent GDP at constant prices last year in what is expected to be the peak of the current Celtic Tiger boom, according to figures released by the Central Statistics Office.

Describing it as "exceptional," the CSO said it was the highest growth rate recorded for the economy in the recent boom years.

At current market prices — before the effects of price increases have been removed — the GDP growth rate last year was 16.2 percent.

In the five years since 1995, the CSO says the economy has grown by 51 percent by GNP at constant prices.

The CSO statistics coincided with figures from the Department of Finance that showed a slowdown this year — as a result of foot-and-mouth and the worldwide economic difficulties — means tax revenues have fallen short of budget expectations.

Treasury returns showed tax revenues rose by 5.3 percent in the first six months of this year — less than half the 12.5 percent prediction in the December budget.

The main cause was weaker consumer spending, particularly on cars. Income tax remained on target, suggesting there has been no major loss of jobs.

In contrast, in their first results of national income and expenditure for last year, the CSO said consumer spending increased by 15 percent with a record figure being spent on a shopping frenzy.

Government expenditure was up 11.2 percent.

Investment in new buildings and capital equipment rose by 16.7 percent in money terms, which is equivalent to 7 percent in real terms.