IMF - Quarter of Irish economic growth in 2017 is APPLE IPHONE "Exports"

[robut]

iPhone exports accounted for quarter of Irish economic growth in 2017 - IMF

Figures are based on Apple holding IP in Ireland, but IMF says iPhone sales don’t fully contribute to Irish economy

Exports of Apple’s iPhone accounted for a quarter of Ireland’s economic growth on a valued-added basis in 2017, a new study from the International Monetary Fund (IMF) reveals.

Overall, the Irish economy expanded by about 7.8 per cent in 2017, which means that iPhone sales would have accounted for a quarter of that, or about 2 per cent of overall growth.

In this respect the authors do add the caveat that the income from these smartphone sales “does not fully contribute to the Irish economy,” as the acquisition of foreign owned IP assets, “leaves domestic employment mostly unchanged”.

So if Apple, like this, account for a quarter of our economic growth .. how about other FDI based here? Would that "eat" further into & account for what appear to be, empty (??) economic growth figures now and into the future?

Ok.. so what does Ireland PLC get out of this?

The report authors seem to say this "growth" does not fully contribute to the Irish economy ( wording it nicely?? ).

So .. is it the JOBS? If so, then the next Q asked needs to be are these APPLE jobs paying enough so the workers contribute enough to the exchequer via income tax etc?? Other threads here discuss apples short term contracts and low pay in likes of Cork?

I put EXPORT in inverted commas in the title because as per article ... "iPhones are not physically exported from Ireland"

Discuss ...

 

[PC Principle]

Interesting.

I'd say the money goes through the Irish accounts that's how they can credit it to Ireland.

The good news is, Irish people get to pay extortionate taxes because the MNC's don't.

Think about that next time people brag about Ireland's wealth and status.

Its all an illusion.

 

[ionsniffer]

the fundamentals are sound

 

[wombat]

Sounds like a pretty silly study or conclusion. If someone handed me a report that obviously didn't make sense, they'd be told not to waste my time. The old saying, if something sounds too good to be true, most likely it isn't.

 

[Mrwoody]

Does this mean we all get free iphones to keep quiet and say nothing

 

[Dame_Enda]

They have us where they want us.

 

[robut]

Quarter of Irish economic growth due to Apple's iPhone, says IMF - RTE

MORE EXTENSIVE ARTICLE ..

In 2011 the corporation tax take here was €3.5 billion. Last year it was €8.2 billion. This raises a very important question - what happens to that tax take if Apple come out with a dud iPhone that nobody wants to buy? What happens to GDP growth? And the budget that is based on assumptions about GDP?

The debt ratio is now 68% of GDP, almost halved from the peak, and getting close to the Maastricht limit.

If the iPhone is the device that saved Ireland, are we now as dependent on its success as we used to be on construction?

But while the export performance of Asian companies is easy to figure out - because it involves tangible objects - components and finished phones - the Irish cases is hard to get a grip on - literally - as it involves intangibles. Apple software is the secret sauce that makes all the tangible components sing together, but it is an intangible service export: a software license or royalty on or royalty on a patent.

But consider this from the CSO: "The top 10 industrial enterprises accounted for 48.6% of all production in Ireland in 2016. These 10 enterprises had an aggregate Net Selling Value (NSV) of €64.8 billion, while the remaining 3,116 industrial enterprises reported €68.5 billion (51.4%)".

That's a lot of selling power concentrated in a small handful of companies.

All this in a country that doesn’t even have an Apple store. Remarkable.

These are just snippets from the article .. way more there to read.

 

[Seanetta]

Oh crApple how i detest them. Over priced iPhones that people flock like sheep to buy :roll:

 

[gerhard dengler]

I thought Apple were booking "sales" to the entities that they moved to Jersey?
Apple Operations International (AOI) and Apple Sales International (ASI) were transferred from Ireland to Jersey in 2015.

 

[SamsonS]

Quarter of Irish economic growth due to Apple's iPhone, says IMF - RTE

MORE EXTENSIVE ARTICLE ..

The article is contained within the first chapter, box 1.1 page 34. World Economic Outlook, April 2018: Cyclical Upswing, Structural Change 

"In 2017, China exported $128 billion worth of smartphones to the rest of the world, equivalent to 5.7 percent of its total exports.
In Korea (the main supplier of smartphone components) semiconductor exports alone accounted for 17.1 percent of total exports. Similarly, components for smartphone production at the peak (October 2017) accounted for more than one-third of exports
from Taiwan Province of China, 17.4 percent from Malaysia, and 15.9 percent from Singapore.
Smartphones contributed about one-sixth the estimated growth rate of global trade in 2017.1 This growth was driven mainly by an increase in value added per unit, rather than units sold, which declined for the first time on record. As a result, the average
sale price of an iPhone increased from $618 in 2016 to $798 in 2017, according to Apple Inc. quarterly financial statements. In the five main Asian economies involved in the tech cycle (China, Korea, Malaysia, Singapore, Taiwan Province of China), total exports
grew by 6.7 percent in 2017. Even though tech exports accounted for less than 10 percent of total exports in the region, smartphone-related exports contributed about one-third the growth rate of total exports.
Ireland, Korea, and Taiwan Province of China are estimated to be the main beneficiaries of the new tech cycle in value-added terms. In Ireland, where the intellectual property of Apple Inc. resides, staff estimate the contribution in value-added terms of iPhone exports
to account for one-fourth of the country’s economic expansion in 2017. At the same time, it is important to note that the income generated from smartphone sales does not fully contribute to the Irish economy.
The acquisition of foreign-owned intellectual property assets leaves domestic employment mostly unchanged.
(See Box 1.2 of the April 2017 World Economic Outlook for further details on issues relating to the measurement
of Ireland’s GDP.) In Korea, the production chain ofsmartphone-related components is estimated to have
contributed about one-third of real GDP growth rate in 2017. In Taiwan Province of China, the contribution
is estimated at about 40 percent. In contrast, for China the contribution is estimated to be much smaller,
reflecting a larger and more diverse economy. "

BTW, the other elements in the RTE article is not wrong the 3.5 to 8b in corp, but he did pick 2011, not say 2007. It was 2016 when corp tax returned to the levels last seen in the celtic tiger period.

And yes, the risk is significant, cant remember the stats, but a very large chuck of our corp tax is dependent on 10 -20 firms.

 

[Marcos the black]

I now live in iMunster, but today I visited iDublin, but we all know that the real capital is iCork as it's the home of Apple. Nothing else matters.

 

[Taxi Driver]

This claim might be right but the aggregates don't seem to support it.

In nominal terms GDP was
2016: €275,567m
2017: €296,152m

This represents a rise of €20.5 billion; a quarter of which is around €5 billion

In overall terms Apple's profit before tax was
2016: $61,372m
2017: $64,089m

For a rise of less than $3 billion. Even if all Apple's additional profits were counted in Ireland it seems to come up short of the amount required to be responsible for 1/4 of the growth in 2017. Who knows what's going on under the bonnet but it looks like it would take a good bit of chicanery for the claim in the OP to hold up.

 

[bokuden]

This claim might be right but the aggregates don't seem to support it.

In nominal terms GDP was
2016: €275,567m
2017: €296,152m

This represents a rise of €20.5 billion; a quarter of which is around €5 billion

In overall terms Apple's profit before tax was
2016: $61,372m
2017: $64,089m

For a rise of less than $3 billion. Even if all Apple's additional profits were counted in Ireland it seems to come up short of the amount required to be responsible for 1/4 of the growth in 2017. Who knows what's going on under the bonnet but it looks like it would take a good bit of chicanery for the claim in the OP to hold up.

Chicanery? With MNCs? In this country? How could such a thing even be suggested??

 

[Lumpy Talbot]

Probably not a good idea to base your view of economic prosperity on a piece of accounting chicanery,

 

[Lumpy Talbot]

It would be an interesting question to ask ... what sum per iPhone accrues to the Irish state?

All very well having falsely inflated export figures via creative book-keeping but if there is no actual benefit accruing to the state other than the statistic itself then we are busily living in another set of false books.

 

[crossman]

It is because of problems like this that CSO introduced a new measure called GNI* that removes effects like this. GNI* is well below GDP.

 

[puffin]

Is this the economic miracle that Northern Unionists are being asked to buy into.?

 

[Jack Walsh]

Interesting.

I'd say the money goes through the Irish accounts that's how they can credit it to Ireland.

The good news is, Irish people get to pay extortionate taxes because the MNC's don't.

Think about that next time people brag about Ireland's wealth and status.

Its all an illusion.

Just like your alter ego

 

[SamsonS]

I will quote the IMF piece again

"Smartphones contributed about one-sixth the estimated growth rate of global trade in 2017".

and for Ireland

"In Ireland, where the intellectual property of Apple Inc. resides, staff estimate the contribution in value-added terms of iPhone exports to account for one-fourth of the country’s economic expansion in 2017"

 

[hammer]

Anyone that uses GDP in Ireland to justify anything needs their head examined.

Nobody can doubt the recovery is in full swing though.

Unemployment plummeting towards 5%

We need a bit of a lift though

Maybe remove levies on Insurance Premiums
Maybe cut excise on petrol
Maybe cut USC a little bit more
Maybe cut LPT by 10%
Fund it with Fatty Tax
Fund it with Off Licence Tax