Economy grew by 0.2% in third quarter

Tuesday 18 December 2012 19.25
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Third quarter GDP up by 0.2% from the second quarter, new CSO figures show
Third quarter GDP up by 0.2% from the second quarter, new CSO figures show
Net exports rose by €598m in the third quarter of 2012 compared to the same time last year
Net exports rose by €598m in the third quarter of 2012 compared to the same time last year

Figures from the Central Statistics Office show that the economy - as measured by GDP - grew by 0.2% in three months from July to September compared to the previous three month period.

The increase was less than had been forecast by economists.

GNP - which excludes the profits from multi-nationals companies - fell by 0.4% over the three-month period.

But the CSO revised its growth for the second quarter from 0% up to 0.4%, while the decline in the first quarter was also less than had been previously thought at -0.5% compared to -0.7%.

Compared with a year ago, the CSO said that GDP rose by 0.8% while GNP increased by 3.7%.

Today's Quarterly National Account figures show that personal expenditure rose by 0.5% on a seasonally adjusted basis between the second quarter of this year and the third.

They also reveal that personal expenditure rose by 0.2% in the third quarter of this year compared to the same time last year.

Net exports increased by €598m in the third quarter of 2012 compared to the same time last year, but they fell by €536m in the third quarter compared to the second.

NCB's economist Philip O'Sullivan said that given how notoriously volatile and revision-prone quarterly Irish GDP data are, in terms of drawing a conclusion from the above he prefers to focus on the underlying trends as opposed to the specific numbers themselves.

''What these tell us is that the gradual recovery in the Irish economy is continuing. On an annual basis, GDP has expanded in five of the last six quarters, while on the same basis GNP has grown in each of the last three quarters. We expect to see this momentum continue into the New Year,'' he added.

''Markets are likely to remain positive on Ireland's prospects for 2013, given the continued outperformance of Irish economic data relative to euro zone colleagues in recent months,'' said Owen Callan from Danske Bank Markets in response to today's quarterly national accounts.

Also commenting on today's CSO figures, IBEC's chief economist Fergal O'Brien said that Ireland is faring much better than most euro zone countries at the moment. He noted that while GDP was fairly flat in the third quarter, it remains on track to grow by about 1% this year.

''Exports have slowed since the start of the year because of difficult trading conditions in Europe, but domestic demand has stabilised. The GNP numbers have been very strong over the past couple of quarters, but this is only partly due to an increase in domestic demand. Other factors, such as international profit flows into the country, have pushed GNP higher,'' he added.