While the average person didn’t need an indication the economy was on the decline in 2023, official figures from the Central Statistics Office confirmed what everyone already knew; the economy entered recession in 2023.
Ireland’s GDP dropped by 3.2% last year according to figures published on Friday by the CSO, with Ireland joining the United Kingdom, Germany, and Japan as global economies that have entered into a recession.
The CSO noted that sectors of the economy more respectable to global markets, such as industry, declined for the first time since 2013.
Industry exports fell by 4.8%, according to the statistics.
Ireland was in a “technical” recession for all of 2023 according to the statistics, although there has been some controversy over what defines a “technical” and a “real” recession in recent weeks by global economists.
Traditional economic orthodoxy defines a recession as two quarters of negative GDP growth, but CSO statistics showed that Ireland’s GDP has now declined for the last four quarters.
This means the Irish economy has been in recession since last summer.
Minister for Finance Michael McGrath told the Irish Times that the domestic economy grew “modestly” thanks to consumer spending which was underpinned “by strong employment growth”.
2.71 million people are employed in Ireland, the highest since figures began, but there are caveats to those figures.
McGrath said that the data shows that consumer spending was flat in the last quarter of 2023, with tighter financial control among households affecting spending in the economy.
He expressed confidence that the easing of inflation, which is now at it’s lowest level since July 2021 will help increase the purchasing power of households.
The CSO noted the impact of ongoing global events, such as the ongoing Russian-Ukranian war and tensions in the Middle East affecting consumer and investor confidence.
Investment in Ireland has dropped according to the CSO, with a 0.4% in private sector investment recorded in the final quarter of 2023.