The economy grew strongly last year, according to the latest national accounts published by the Central Statistics Office today.

The CSO said that when measured by GDP, the economy grew in 2021 by 13.5%. Modified Domestic Demand, which measures activity in the domestic economy, grew by 6.5%, it added.

The continuing dominance of the multinational sector on the Irish economy contributed to Ireland becoming the fastest growing economy in Europe last year.

Today's CSO figures show that the multinational sector grew by 22%, boosted by exports, while the domestic economy grew by 5%.

Overall, GDP grew by 13.5% while modified domestic demand grew by 6.5%.

Some parts of the domestic economy recovered strongly with transport, hotels and restaurants growing by 6.2%. However, construction fell over the year by 4.7%.

Industry, dominated by pharmaceutical companies, grew by 24% while the ICT sector grew by just over 14%.

Growth did slow in the last three months of the year. Inflation contributed to a decrease in personal consumption and there was a pause in the pace of exports.

Investment jumped a massive 76.5% in the last quarter, which the CSO attributes to the purchase of computer hardware for data centres and people working at home.

The income of workers across the economy also grew strongly with average compensation up by 8.1%. The highest increases were in the ICT and professional services sectors, the CSO noted.

Commenting on today's figures, Minister for Finance Paschal Donohoe noted that the economy - as measured by Modified Domestic Demand - increased by 1.3% in the final quarter of last year.

"It is now 7% higher than it was immediately before the pandemic, which is a positive development," the Minister said.

"The main takeaway for me from today's figures is the confirmation of the robust growth in the domestic economy in 2021, notwithstanding the lockdown in the first part of the year and on-going Covid challenges over the course of last year," he added.

Mr Donohoe said that consumer spending grew by 5.5% last year, supported by the strength of the labour market there is now a record level of more than 2.5 million people in employment.

"Wages are also growing, up 8% last year according to today’s figures. These trends are also in-line with strong growth in VAT and income taxes recorded in 2021," he added.

He also said that, encouragingly, investment grew strongly despite Covid uncertainties, with private sector investment in plant and equipment particularly strong.

"Construction activity, including in new housing, recovered strongly following the first quarter lockdown with the level of housing supply in line with previous years. Looking forward, the fact that we had over 30,000 new housing starts last year points to continued strong momentum in house building this year," he added.

Minister Donohoe said that the post-Covid recovery is now taking place at a time of unprecedented geopolitical instability and uncertainty.

"Ireland's support for Ukraine’s sovereignty and territorial integrity is unwavering. The sanctions that Ireland, along with many other countries, has imposed on Russia will have a severe and lasting impact on the Russian economy," he stated.

But he added that the sanctions and broader conflict will not be without cost for Ireland as well.

"While our direct trade links with Russia are limited, the Irish economy remains exposed to the recent spike in commodity prices and other spill-over effects," he said.

"Indeed, some of our key trading partners are highly reliant on Russia and Ukraine for certain goods and Russia plays an outsized role in global energy and commodities markets, which is likely to lead to higher inflation in the short term," he added.