UPDATE 1-Ireland’s first quarter GDP grows sharply, lockdown is not as severe


* Minister says GDP is not a good indicator of underlying activity

* Modified domestic demand -2.9% q / q, -5.0% yoy

* Government says domestic recovery started in Q2, is expected to accelerate

DUBLIN, June 4 (Reuters) – Ireland’s gross domestic product rose 7.8% quarter-on-quarter and 11.8% year-on-year in the first three months of the year as the large multinational again depreciated the blow of a strict foreclosure that has affected other sectors of the economy.

But the damage to the national economy has not been as severe as it was during the initial shutdown last year. Modified domestic demand, a measure that eliminates some of the ways multinationals can distort Ireland’s GDP, fell 2.9% in the quarter and was 5.0% lower than in the first three months of 2020, mostly before the pandemic.

The measure, which is more closely watched by economists and ministers as it covers personal, government and investment spending, collapsed 16.4% in the April-June quarter of last year during Ireland’s first lockdown.

Finance Minister Paschal Donohoe said the exceptionally strong GDP growth was due to a relatively small number of sectors generating limited domestic jobs in some cases, it was not an accurate measure of what is happening in the economy .

“I put a lot more emphasis on measures like modified domestic demand. Encouragingly, while the level of restrictions was comparable to that of the first foreclosure, the fall in domestic economic activity was much less severe there, ”Donohoe said in a statement.

Donohoe said the data shows businesses and consumers alike have adjusted to the restrictions much better this time around, a phenomenon that has been confirmed by other data as well.

Ireland still faces a major employment challenge with 22% of those without temporary or permanent employment at the end of April, when the government slowly began to unravel its third and longest shutdown.

Restaurants and bars won’t be fully open until early July and have only negotiated four of the past 15 months under one of the world’s toughest lockdown regimes.

However, Donohoe said a recovery in the national economy started in the second quarter and is expected to accelerate in the second half. (Additional report by Conor Humphries; Editing by Hugh Lawson and Jane Merriman)


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