Wednesday 7 December 2016

Kenny hopes for growth in 2012 despite 'challenging environment'

Published 29/03/2012 | 05:00

TAOISEACH Enda Kenny told Chinese students yesterday that he expected "modest growth" in Ireland this year as new figures from Britain showed that the UK economy grew at a slower rate than the Irish economy last year.

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Mr Kenny made the prediction despite what he called "a very challenging global environment".

The forecast comes a week after the Central Statistics Office revealed that Ireland was back in recession for the first time since 2009.

The Government says gross domestic product will expand 1.3pc this year, although that forecast is expected to be revised downwards in April.

Britain said yesterday that the economy shrank by more than expected in the last quarter of 2011, driven down by a weaker services sector.

Contracted

The Office for National Statistics (ONS) said the economy of our second-largest trading partner contracted by 0.3pc between October and December, taking the annual rate of growth to 0.5pc.

That is less than the 0.7pc recorded by the Irish economy.

The figures from the ONS provide further confirmation of the weak state of Britain's economy at the end of last year, but offer few clues as to whether it managed to stage a recovery early this year -- something economists view as likely given recent data.

Nonetheless, the figures may reignite expectations the Bank of England may need to add additional stimulus to bolster growth.

The ONS said the downward revision was driven by the transport and communication and business services and financial sectors.

Meanwhile, household incomes fell and the saving ratio also eased to 7.7pc in the quarter, its lowest since the start of the year.

The ONS said real household disposable incomes in 2011 as a whole fell 1.2pc, the biggest drop since 1977.

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