A reading using these statistics is not fully accurate simply due to the fact that the statistical distortion created by multinational companies in Ireland sway these numbers. This includes the large activity of transferring the depreciation of intellectual property. AAlso the large number of leasing companies that have moved their headquarters to Ireland in the recent years. The latest GDP statists that have been published internationally show that Ireland’s per capita GDP comes in 5th place out of the 182 countries, and Ireland is first in all of Europe. While these large profits are within the Ireland borders, the majority of these profits are being funnelled by foreign multinational companies that in turn use their profits elsewhere.
In fact, using these skewed statistics like GDP can mislead data in other matters, such as debt, inequality, and worker laws. The GNI statistics is an alternative measure to the GDP, however, it is also affected by the large number of multinational companies located in Ireland and is not a clear representation of the average Irish citizen’s financial situation.
When we look at a holistic approach of Ireland’s financial situation without the interference of these large international companies that have set up shop in Ireland, we see that the GDP and GNI of Ireland actually push the country’s rank down to around 8th place within the European Union.
An alternative indicator that could be used to look at Ireland’s current economic state would be “actual individual consumption”, or AIC, which takes into consideration consumption of households and spending by government on individual services. These services could be healthcare, public institutions, transportation et… This shows the State’s level of activity within an individuals level of consumption per year. Look at this statistic, Ireland is actually placed behind all six of the original founder members of the EEC, as well as Austria and other Nordic member states.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.
Relevant Links: What is GDP?, Ireland’s Current finances