DUBLIN, July 14 Reuters First quarter growth in Ireland39;s domestic economy was revised sharply lower to 0.1 from a provisional reading of 2.7, partly as a result of revisions further back showing activity was flat rather than falling in the final quarter of 2022.

With Ireland39;s large multinational sector often distorting gross domestic product, officials prefer to use modified domestic demand to gauge the strength of the economy, and a final fourth quarter reading of 0.0, up from 0.9 previously, meant the domestic economy avoided a shallow recession in 2022.

Modified domestic demand, which strips out some of the ways multinational activity can inflate activity, grew 9.5 in 2022 as a whole, up from an 8.2 prior estimate and faster than gross domestic product GDP growth in any euro zone economy.

Activity surged in the first half of last year due to a sharp rise in investment in items such as plant and machinery and a postpandemic rebound in spending on services.

Finance Minister Michael McGrath said the figures were encouraging given inflation averaged 7.8 last year.

Looking ahead, the strength of our labour market, rising consumer confidence and the easing in inflation, should all support growth over the remainder of the year, McGrath said in a statement on Friday.

That being said, many of the headwinds to growth which existed at the start of the year remain everpresent, he added, pointing to significant capacity constraints in housing and the jobs market,…