Ireland is set for an “exceptional rise” in economic activity this year on the back of its multinational sector, prompting Davy to revise up its projection for gross domestic product (GDP) by “at least” another 50 per cent on Friday.
It was the second time in under a month that Davy has significantly revised up its projections.
On Friday, Davy said it was revising its forecast to 15 per cent on the back of GDP data released by the Central Statistics Office (CSO) on Thursday which showed a 6.3 per cent expansion in the second quarter.
However, it cautioned that domestic economic activity was still below pre-pandemic levels.
“The key message was a very gradual recovery in domestic activity,” it said. “Indigenous sector output rose by only 2 per cent in the second quarter, still 6.4 per cent below pre-pandemic levels.
“Hopefully more of the rebound from the third lockdown restrictions will become apparent in the third quarter GDP data.”
Thursday’s data from the CSO showed that Irish GDP rose by 6.3 per cent in the second quarter following 8.7 per cent growth in the first. “This is well ahead of our expectations,” Davy said. “GDP was up an enormous 22 per cent on the year.”
The data for Ireland’s indigenous economy painted “a more sedate picture” as sector output rebounded by 2 per cent in the second quarter after the third lockdown had depressed activity early in the year but was still 6.4 per cent below pre-pandemic levels.
Meanwhile, the latest Exchequer returns from the Department of Finance on Thursday showed a surprise €800 million surge in corporation tax receipts last month has placed the Government in a stronger position financially ahead of the upcoming budget.
The figures from the Department of Finance show the business tax generated €1.04 billion in August, 323 per cent, or €797 million, more than expected. August is typically a quiet month for corporation tax.