SUMMARY

The recently published National Income and Expenditure accounts for 2005 show that GNP and GDP grew by 5.4 per cent and 5.5 per cent respectively last year. Figures for the first quarter of 2006 point to continued strong growth this year, as real GNP expanded by 6.2 per cent and GDP grew by 6.0 per

The revised estimates for 2005 point to stronger growth in the volume of exports than previously thought, though the volume of imports also rose. The combined effect was for external trade to make a negative contribution to growth in the Irish economy, a trend which we expect to continue both this year and next. Domestic demand has, therefore, been the catalyst for growth over the year. Investment growth was particularly strong, expanding by 12.8 per cent, the largest increase so far this decade. Consumption also grew strongly at a rate of 6.6 per cent. The current account balance deteriorated noticeably in 2005. It increased to almost 3.1 per cent of GNP in the year from less than 0.7 per cent in 2004. The deficit is expected to widen further this year and next, with a forecast rate of 4.1 per cent of GNP in 2006 and 5.4 per cent in 2007.