Ireland’s GDP for 2015 has risen 26%.
That is impressive.
Except for the fact that the figure is nothing to do with any shift of direction in the greater Irish economy.
GDP is a controversial measure of economic success at the best of times. Especially when you remind yourself of how the UK leapfrogged the French for the title of 5th largest economy. Cliff Taylor’s article details nicely the components that are likely to have made up the jump. “Likely” because the exact information is not being released.
In summary the figure has come from the following
Contract Manufacture
Making something oversees and then “importing” it through another country, such as Ireland which pretends to export it to you.
Tax inversion
An example of this might be a multimational like Google allowing itself to be bought by a local Irish newsagent. The newsagent is now the new headquarters, located in a low tax regine like, say Ireland.
Relocating Patents
Intellectual property, the value of which is hard to pin down and which is easier to move than a factory, is relocated to a Tax Haven. Due to pressure to stop doing this it appears that some companies have restructured to move intellectual capitol from no tax havens to low tax havens, like Ireland. Asking for some tax appears actually to be benifical in this case. Who would have thought.
Aircraft Leasing
Having your fleet loaned out of Ireland adds to the GDP. Aircraft are relatively to move, not that this is actually what is happening
One wonders if state pensions are linked to growth. Unlikely, but the ability to set policy around joke figures is obviously diminshed.
However this one good measure in all of this. This accurately depicts the relative insignicance of national budgets when compared to multimational profits and assets.