Figures from the Central Statistics Office show a mixed performance from the economy in the first three months of the year, with exports strong but domestic demand still weak.
Economic output - as measured by gross domestic product - grew by 1.3% in the first three months of this year.
As GDP includes profits made by US multi-nationals based here, many economists prefer to focus on gross national product (GNP), which showed a drop of 4.3% in the first quarter.
Minister for Finance Michael Noonan said the CSO figures were 'encouraging' and consistent with the Department of Finance's estimates. But he acknowledged that the domestic economy was 'flat'.
The CSO also noted that increased outflows of profits from multi-nationals and a fall in profits earned abroad by Irish-based companies exacerbated the difference between GDP and GNP in the first quarter.
Compared with the first quarter of 2010, GDP was up 0.1%, but GNP was down 0.9%.
The CSO also said the economy's performance in 2010 was not as bad as it had first thought. It said GDP fell by 0.4%, instead of the 1% drop previously reported. GNP actually rose by 0.3% last year. The CSO had previously estimated a 2.1% decline.
A breakdown of the Q1 figures show that net exports - exports minus imports - grew by 20.6% in the past 12 months, but spending by consumers dropped by 2.9% in the same period.
In the first quarter, exports grew by 3.8% from the previous quarter, but personal spending and Government spending both dropped by 1.9%.
Industrial production also slipped slightly after two quarters of growth, with building and construction output down 15.4% compared with the previous quarter.
'Something for everyone' in CSO figures
NIB economist Ronnie O'Toole said the figures were somewhat better than expected, but it was 'early days yet'. He said the quarterly figures should be treated with caution, as there were huge quarter-by-quarter fluctuations linked to the timing of profit repatriation and multi-national sales.
Goodbody economist Dermot O'Leary said there was 'something for everyone' in the figures, but the economy had effectively been stable over recent quarters. He also pointed to a 'glimmer of hope' in the 2% annual increase in business investment, the first growth since the end of 2007.
KBC Bank economist Austin Hughes said the sharp rise in GDP overstated the current health of the economy, which was over the worst but struggling to gain momentum.
Davy's also said that today's data came as something of a relief for investors, who had had harboured severe worries about the sharp contraction in nominal GDP in the last quarter of 2010.
Payments balance back in black last year
Separate CSO figures show that the balance of payments current account deficit in the first quarter of this year was just over €1 billion, well down on the almost €1.5 billion deficit in the first quarter of 2010.
The balance of payments measures flows of income into and out of the economy. The merchandise surplus of more than €9.1 billion in the first quarter was boosted by strong exports.
Revised CSO figures also show that the balance of payments returned to a surplus for the first time since 1999 last year, recording a positive figure of €761m. The CSO had previously reported a €1.1 billion deficit for last year.
Economists generally welcomed the return of the balance of payments to surplus, with KBC saying it was a pointer towards the longer-term health of the Irish economy.
