Lepreconomics lead to an increase of some €280m in Ireland's EU contributions

Michael Noonan confirms that 26% growth means more money will go from Dublin to Brussels...

Ireland's contribution to the European Union has been revised upwards following the release of the Central Statistic Office's (CSO) official figures which showed that the Irish economy expanded by 26% last year.

In a response to a question from Fianna Fáil's Finance spokesman Michael McGrath - Finance Minister Michael Noonan confirmed that the massive growth will affect our EU payments.

The additional payments will be "in the order of €280m," higher when compared to the Government's Summer Economic Statement.

These growth figures are inflated by aircraft purchases, corporate restructuring, and companies moving assets (particularly patents) to Ireland from other territories.

Assets have come into Ireland through so-called capital inversion deals - and one aircraft leasing company redomicilled its multibillion euro balance sheet.

Nobel Prize-winning economist Paul Krugman coined the phrase 'Leprechaun economics' - it feels like one that might stick.

A statement from Finance Minister Michael Noonan following the publication of the figures contained no reference to their inflated nature, he welcomed the strong growth and noted that they will improve the country's "deficit and the GDP to debt ratios."

He added that the improved finances mean, "Peoples’ lives are improving with more at work than at any time since the onset of the downturn. We no longer need to impose swingeing cuts to public services rather we have room to invest in services and infrastructure."

The figures create a problem for the Government who need reliable figures to draw from when preparing the 2017 Budget.

Personal consumption was 4.5% higher - this normally runs about a percent below Ireland's growth rate, suggesting that the real expansion was still impressive and between 5-6%.

While Michael Connolly of the CSO accepts that people are shocked by the sizeable percentage, he stands by the calculations about the state of the nation's economy.

"That's how we understand it," Connolly said.

"We are a very small economy and if we get a big increase in assets, this is what happens.

"We were obviously looking over countries where these sort of numbers occur and they occur when something very dramatic happens or a collection of things comes together."