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July 31, 2018

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Fact Checker

You might be over-reading the GDP data on consumption Michael. It is notoriously volatile and the dip in new car sales (yoy) in Q1 has probably kept the consumption down.

VAT in the first six months of the year was still up 3% yoy. This is a slowdown on the rate of growth seen in recent years but is still very healthy in an ultra-low inflationary environment.

Michael Taft

Fact Checker - thanks for that. I may be over-reading the data but it is worth noting. NERI's QEO published today showed the Retail Sales Index falling from 6.7% in 2016 to 2.9% in 2017. Further, the index shows that there was a small fall in value in motor car sales in 2017. So I'm not sure the motor sector is playing much of an issue. We'll have to wait and see.

Fact Checker

My point was more about Q1. The volume of motor trades fell 5.6% yoy in Jan-March 2018 compared to Jan-March 2017.

Around half of the year's car sales are in the first quarter, so, this will have a big impact on quarter-on-quarter changes on overall consumption in GDP, seasonally adjusted.(https://www.cso.ie/en/releasesandpublications/er/rsi/retailsalesindexmarch2018/)

Car sales are always volatile along with some other sectors. The index for all retail sales excluding motor trades, fuel and bars was up 4% in the three months to May compared to the same period previously (https://www.cso.ie/en/releasesandpublications/er/rsi/retailsalesindexmay2018/).

Private consumption growth is still very healthy.

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