The Irish economy grew by a better than expected 3.3 per cent in 2003 and the strong performance in the fourth quarter should provide momentum for early part of 2004, official figures from the Central Statitics Office show today.
Gross National Product (GNP), the most reliable figure for measuring Irish economic growth rose by 3.3 per cent in 2003, compared to 0.1 per cent in 2002.
The corresponding growth rate in the more volatile GDP figure was 1.4 per cent, owing to the decline in profits of multi-national companies operating in Ireland.
The figures show that the economy performed particularly strongly in the fourth quarter of 2003 with GNP picking up by 5.5 per cent on the same quarter of 2002.
Economists said the economy was set to power ahead after a spell in the doldrums when Ireland's export-driven suffered as a result of the global economy.
"We had a very strong final quarter which showed signs of recovery," said Mr Alan McQuaid, economist at Bloxham Stockbrokers.
Consumer spending rose by 1.9 per cent in 2003 compared with 2002. Industrial output increased by 2.3 per cent the service sector rose by 3.2 per cent.
Capital investment declined by 2.9 per cent in 2003 compared with 2002.
Mr Austin Hughes, economist at IIB Bank in Dublin said today's figures "broadly" confirm the picture of a "reasonably healthy economy" suggested by employment figures released earlier in March.
"Today's data point towards a relatively solid economic performance in 2003 and an improving trend over the course of the year but we would be reluctant to suggest that 2004 will be markedly better," he said.
Mr Hughes pointed out that both GNP and GDP data are quite volatile indicators because of the openness of the Irish economy. Fluctuations in the profits of multinationals can have quite dramatic and sometimes opposite effects on the two measures which do not translate into the "real" economy.
For these reasons Mr Hughes said comparing 2002 and 2003 GDP growth rates could be misleading because it fails to capture the improvement in underlying economic conditions during last year that is suggested by other data.
He said the corresponding change in GNP growth rates between the two years likely overstates this improvement.
As a result, patterns in employment may be a better indicator of prosperity and prospects for jobs growth look moderate at best this year if global demand remains in the doldrums.