At the headline level, Irish economic data is so noisy and seemingly contradictory that it’s open to extremes of interpretation. A case in point: the second-quarter national accounts from the Central Statistics Office.

Looking at it through the lens of gross domestic product (GDP), the economy’s performance appears miraculous. After a precipitous 12 per cent quarterly fall in the first three months of the year, GDP expanded by more than 10 per cent amid a surge in exports.

As we know from bitter experience, however, GDP is an unreliable indicator. The decline in the early part of 2026 was due to the unwinding of a surge in pharmaceutical exports in 2025 as multinationals sought to get ahead of US tariffs.

Modified domestic demand (MDD), which removes large intellectual property-related and aircraft leasing transactions from the equation, is economists’ (and the Government’s) preferred metric. Through that lens, the economy has expanded by 3.1 per cent so far this year, despite a slowdown in the second quarter. That is roughly in line with the most recent full-year forecasts from the Central Bank and the ESRI, which both improved their MDD outlook slightly in June.

Those upgrades were informed by a boom in investment in information and communication technology equipment in late 2025 and into early 2026.

“This investment has been linked to the import of equipment for data centres, particularly those used to facilitate [AI],” the ESRI said at the time. It includes things like microchips, which have to be replaced on a very short timeline, meaning “there will not only be [capital formation] where new ones go ahead”, said ESRI economist Conor O’Toole in June, “but there’ll be high depreciation investment.”

There is some evidence that this trend stalled a bit in the second quarter. Overall, the decline in MDD was driven by a fall in investment, with new capital formation contracting by 5.2 per cent quarter on quarter, according to the CSO data.

It’s too early to say whether this is merely a dip or part of a larger trend. What is clear, however, is that even when the biggest distortions are stripped away, multinationals continue to fog the lenses through which we view the Irish economy.