Transcript GDP + 26.3% (+7.8%)

CSO Ireland
Economic Statistics Review Group
DIME – ITDG Plenary Meeting
14-15 February 2017
Joe Treacy
www.cso.ie
1
Year-on-Year
Growth Rates
€billion
Results 2015
260
Annual GDP & GNP Constant Prices
2006 - 2015
240
220
GDP + 26.3% (+7.8%)
GNP + 18.7% (+5.7%)
200
180
160
Previous provisional
estimate in brackets
GDP
GNP
140
120
100
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Some details
• Figures based on hard data from respondents
• Important role of CSO’s Large Cases Unit (LCU) –
quality and consistency across macro and
business statistics
• Changes driven by globalisation activities
• Ongoing trend – but scale was different
• Significantly - a small number of entities involved
• Figures compiled in compliance with ESA 2010
• Figures have been verified by Eurostat
www.cso.ie
3
Globalisation Measurement Challenges
• Centre of economic interest (resident units)
– Headquartering: re-domiciled firms & corporate
inversions
– Relocation of assets, particularly intellectual property (IP)
• Change of economic ownership
– Contract Manufacturing, significant MNE activity, but also
carried out by domestic firms
– Aircraft leasing
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4
ESRG established by CSO
High-level cross-sector consultative group established
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Philip Lane (Chair) - Governor of the Central Bank Of Ireland
Alan Barrett - Director of the Economic and Social Research Institute (ESRI)
Seamus Coffey - University College Cork
Thomas Conefrey - Economist with the Irish Fiscal Advisory Committee (IFAC)
John Fitzgerald - Trinity College Dublin (TCD) and formerly ESRI
John McCarthy - Chief Economist Department of Finance
Dan O'Brien - Chief Economist at the Institute of International and European
Affairs in Dublin and a columnist with the Irish Independent
Fergal O'Brien - Chief Economist with IBEC
Frances Ruane - TCD, ESAC & and formerly Director of the ESRI
Marie Sherlock - Chief Economist with SIPTU
Rossa White - Chief Economist with the NTMA
Jennifer Banim and Michael Connolly (CSO)
Eurostat and IMF (International observers)
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5
ESRG – Summary of Terms of Reference
• Provide direction to the CSO on how best to meet user
needs for greater insight into Irish economic activity
• A focus on measures additional to the CSO’s legal
requirement to produce national accounts and balance
of payments statistics
• New presentations of existing information to improve
understanding
• Recommendations to be feasible, consistent over time,
cover short- and long-term initiatives
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6
ESRG – Main findings
• 13 recommendations across 5 main themes
– Level Indicators: modified measure of the size of economy
to support additional analysis – “denominator issue”
– Structural Indicators: understand the MNE vs Domestic
structure of the economy
– Cyclical Indicators: to provide additional detail on what is
happening domestically (focus on expanded component
analysis of Expenditure side of National Accounts)
– Communications
– Co-operation
• Focus on insight into domestic activity
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7
Level Indicator - Illustration
GNI * Proxy: GNI less Depreciation for Large Case firms
80,000
60,000
40,000
20,000
0
-20,000
-40,000
2014-Q1
GDP
2014-Q2
NFF
2014-Q3
LCU
2014-Q4
GNI*
2015-Q1
GDP
2015-Q2
2015-Q3
2015-Q4
2016-Q1
2016-Q2
2016-Q3
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Structural Indicators - Illustration
• Foreign-owned vs domestic view of economic structure
• Initially use LCU firms as basis for split
• Ultimately build up from the micro (company) data for all
foreign-owned firms
Estimated split of foreign/domestic value added (2014) based on sources of foreign marker
Total Gross Value
Added (€bn)
Foreign-owned firms (€bn)
Domestic firms
(€bn)
% Foreignowned
177
LCU firms
42
135
24.0%
177
LCU + all other
firms with
foreign marker
58
119
32.9%
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Example: Extended Sector Accounts
S11
Non-
Financial
Corporations
S11
S11
Foreign
MNEs
Domestic
incl. Irish
MNEs
incl. LCU
S12
Financial
Corporations
S13
Government
S1M
S2
Households
Rest of
World
and NPISH
Structure and Activity Detail
• Ownership Structure
– Foreign MNEs
– Irish MNEs
– Domestic
• Activities related to globalisation carried out by all structural
groups
– For example, contract manufacturing
• Detail for users is ideally structure by activity
– Contract manufacturing carried out by foreign MNEs
– Contract manufacturing carried out by domestic firms
– Etc.
• Difficult to have detailed data needed
• Confidentiality may limit what can be publish
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11
CSO response
• Report welcomed
• Multi-year programme to deliver recommendations
– Short-term (during 2017) and longer-term deliverables
• Dependent on resources and availability of data with
frequency required
• CSO will take incremental approach – initial
development, focusing on annual analyses and then
review
• What looks reasonable on paper may not always be
feasible in practice
• Other CSO work started / planned on globalisation:
– Productivity Analysis
– Micro-to-macro in line with work of Eurostat TF
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Take Away Messages
• Value of headline indicators of GDP/GNP/GNI in globalised
economies undermined
• Not just an Irish problem
• Access to all relevant data sources at national level a pre-requisite
• Users need to be involved in developing the next steps
• Communication is critical: difficult given the complexities involved
but we underestimated our leadership role
• Ill-informed commentary over social media difficult to address
• In our case, confidentiality hampered communication
– Case for early alert mechanism between MS (information
sharing)
– Counterpart can be outside EU (global problem)
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13
Developing rules and guidelines
• Coherence between statistical domains:
• Should Business indicators always follow same scope
as National Accounts?
– FRIBS: Opportunity to address globalisation issues
in updating the EBS manual: Guidelines and case
examples.
– Principles: What is the indicator used for? Scope?
– Count once: Don’t miss anything. Don’t double
count.
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14
Developing data sources
• Comprehensive Data Sources are needed
– Surveys aren’t enough any more
– Need administrative and statistical records
– Profiling
– Data coherence
– Large Cases Unit
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