Economy emerged from recession, new CSO figures show

Thursday 19 September 2013 22.06
Consumer spending picked up over the three-month period
Consumer spending picked up over the three-month period

After slipping into recession at the end of last year, the Irish economy returned to growth between April and June of this year.

Preliminary figures from the Central Statistics Office show that GDP, which is the total value of economic output in the country, grew by just under 0.5% during that period.

Growth in services exports, which includes everything from tourism to financial services, was a key factor in the improved second quarter performance in the Irish economy.

Consumer spending, which had been consistently in decline since 2009, also picked up over the three-month period.

The level of spending picked up by almost 0.75% compared to the first three months of the year.

But there was also an increase in the level of profit being sent overseas by foreign-owned corporations.

That means that GNP, a measure of economic output that excludes the profits made my overseas investors, actually declined over the second quarter.

So while GDP rose by 0.4%, GNP fell by the same margin highlighting the complex dynamics that underpin the Irish economy.

Taoiseach Enda Kenny has admitted that the latest figures for growth in the economy are slower than the Government had predicted.

Speaking in Carlow, he declined to say if these figures would have an effect on how the budget is framed.

He said the GDP figures were encouraging but that the country had a long way to travel.

Minister for Finance Michael Noonan said framing Budget 2014 would still be difficult, despite the encouraging figures.

He said the Government could build on today's news, but a tough budget would still be required.

Doherty says growth below Government expectations

Sinn Féin finance spokesperson Pearse Doherty said the economic figures were disappointing.

Speaking on RTÉ’s Six One News, he said that when the Government took office in 2011 it had projected growth rates of 3% this year, but had downgraded this figure in 2012 to 2.2% and had further downgraded it to 1.3% last year.

Mr Doherty said that we would need to have a nominal growth rate of 7.5% in the second half of this year to reach the Government's targets.

He said the figures show that the economy has not grown to the level that was expected and that this should be a lesson for the Taoiseach and Minister for Finance that the experiment of austerity has failed.