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Economic Growth Strongest in 15 Years

CSO Quarterly National Accounts figures for Q4 2015 were released this morning and show GDP to have increased by 7.8% annually in 2015, outstripping all other euro zone countries and most official forecasts. This is the fastest annual GDP growth since 2000, when the economy expanded by 10.2%. GNP also performed strongly, up 5.7% year-on-year.

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Investment activity grew by 28.2% in 2015, while personal consumption, the largest component of domestic demand, rose by 3.5%, with car sales highlighted as a main contributor. Import growth of 16.4% in 2015 outpaced that of exports at 13.8%.

Consumer Sentiment and Retail Sales

Consumer sentiment has returned to levels last seen in early 2006. The index reached 105.8 in February 2016, representing a 10.1% increase relative to February 2015, or a 167% increase since the series reached its lowest point in July 2008.

The latest CSO data show retail sales volumes to have increased by 10.3% in the year to January on the back of a sharp increase in car sales. If motor trades are excluded, sales were up by 6.3% year-on-year. The total value of retail sales grew by 8.9% annually during this period, or 4.5% ex. motor. The breadth of the recovery is evidenced by the fact that all thirteen retail sectors saw annual increases in both volume and value terms in January, with the strongest performing categories being cars (+20%), clothing & footwear (+12.4%), furniture & lighting (+12.3%) and department stores (+1.9%) (in volume terms).

The Visa Europe Consumer Spending Index shows that there has been no slowdown in household expenditure in the beginning of 2016, registering a year-on-year increase of 11.3% across all payment methods in February, faster than the 7.5% increase recorded in the year to January and the steepest increase recorded in the 18-month series history. High street retailers benefitted from an increased willingness among consumers to spend on discretionary items, leading to a 9.2% annual rise in expenditure relative to February 2015. Online spending continued to see a sharper expansion, up 15.4% year-on-year.