Ireland has increased its economy by €10 billion (£7.9 billion) thanks to a revision of its gross domestic product (GDP).
For the first time the country has included research and development (R&D) costs and illegal activities into its figures providing boost to its overall financial standings. The move allows the Irish government to assess different ways in which it can cut its austerity programme which has been made a little simpler thanks to the six per cent increase in national income numbers.
In 2013, the country's GDP has continued to perform strongly largely due to the boost provided by a strong construction sector. Figures released in December showed a 1.5 per cent increase quarter-on-quarter in GDP but this was hampered by a 0.8 per cent decline in exports from Europe. Ireland is dependent on trade from the continent but the downturn felt around Europe had a knock-on effect in the country.
Over the past year, Ireland's GDP has seen a 0.2 per cent increase with the overall economy growing by 2.7 per cent as a result. The European Union's rules means that R&D investment, illicit gambling, drug dealing and activities linked to prostitution can be included within GDP figures.
Speaking to the BBC, Conall Mac Coille, chief economist at Ireland's biggest securities firm, Davy Group, explained that the new figures have allowed the country to cut its debt-to-GDP ratio from 123.7 per cent and a deficit at 7.2 per cent of GDP to 116 per cent and 6.7 per cent respectively.
"It's a measurement issue rather than a real improvement. But since exchequer returns were outperforming anyway, it looks as though the finance minister can bring the deficit down below four per cent of GDP by the end of the year and hit his deficit target of three per cent easily by the end of 2015, without having to do very much at all in the way of austerity," Mr Mac Coille added.
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