Ireland reports strong economic growth

Business Week:

Ireland's economy is maintaining a Europe-leading pace of growth thanks in part to strong consumer spending and a continuing construction boom, the government's Central Statistics Office reported Thursday.

Its report said gross national product, or GNP, grew an annual 7.0 percent in the third quarter of 2005, compared to the same July-September quarter of 2004. It said gross domestic product, or GDP, grew 4.8 percent.

Ireland is currently rated the second-wealthiest country in the 25-nation European Union, behind only Luxembourg, thanks to the past decade of economic expansion driven by heavy investment by high-tech multinationals, particularly in the computer and pharmaceutical industries.

However, economists consider GNP a better measure of Ireland's indigenous economic health than GDP, which includes the economic activities reported by more than 500 foreign multinationals with operations in Ireland. Much of those companies' profits are shipped to banks overseas.

The report said consumer spending rose 6.5 percent in the third quarter of 2005 compared to the same period last year, while capital investment -- including the government's expanding program of building toll motorways and other infrastructure -- rose 7.7 percent.

Thursday's growth figures were the highest recorded since the first quarter of 2004, when GNP and GDP growth was measured at 7.5 percent and 6.9 percent, respectively.

Economy grew by 4.8% in third quarter