The huge VAT fraud on computer parts sales to Britain helped knock more than Ђ11bn off Irish exports last year, figures from the Central Statistics Office say.
The value of trade with Britain had to be cut dramatically in the statistics when it emerged that billions of euros in declared exports and imports were part of the gigantic fraud where computer chips were moved backwards and forwards claiming VAT refunds.
According to the figures, exports to Britain fell by more than a third, or Ђ7.4bn, compared with 2003. Imports dropped 30%. Total trade in the affected sector of electrical machinery and parts dropped by half.
Analysts agree that last year was a weak one for foreign trade, as the effects of the global downturn continued. But they say it was not nearly as bad as the adjusted figures suggest.
"The effects of the fraud must have knocked at least Ђ6-7bn off the trade figures," said Dermot O'Brien, chief economist at NCB Stockbrokers.
