The economy returned to growth in the second quarter, bringing an end to nine months of recession.
Gross domestic product (GDP) expanded a tepid 0.4pc in real terms between April and the end of June after contracting in the previous quarter, according to figures released by the Central Statistics Office this morning.
The economy shrank 0.4pc when measured by gross national product in the same period. GDP fell 1.2pc in the year while GNP inched down 0.1pc.
The small increase in GDP and decline in GNP will disappoint economists who hoped that a surge in growth would give Finance Minister Michael Noonan room to unveil a softer Budget in four weeks.
Mr Noonan said earlier this week that he would wait until the publication of these figures and exchequer figures due out early next month before deciding on the scope of Budget cuts.
Economic figures are often revised significantly which means that Mr Noonan is unlikely to be able to draw many conclusions from today's figures.
The main driver of economic growth in the last quarter was once again exports of services allied to a small pick up in personal consumption.
Declines in investment and government consumption held back growth.
While Ireland's second quarter growth was small, it was still slightly higher than the euro zone average.
Among the good returns for the country, there were signs of growth and improvement in shattered building and construction businesses.
The sector has reported growth of 4.2pc from March to June.
The revival will go some way towards alleviating the impact of massive unemployment caused by the 170,000 builders who lost jobs in the wake of the property collapse from 2007.
Other improvements which have helped spark another recovery include a €1.5bn increase in exports and people spending more - up 0.7pc on the first three months of the year.
Businesses involved in distribution, transport, software and communication increased by 1.4pc.
The Irish economy was in recession throughout 2008 and 2009 before recovering slightly and then dipping again at the end of last year and start of this year.
Aidan Punch, CSO assistant director general, warned against reading too much into small changes in economic figures.
"All of these are very minor changes - very, very minor changes. So it's important not to read too much into it," he said.
Mr Punch said it was a "conundrum" that GDP has fallen year-on-year while employment rates seem to have increased.
"They nearly seem counter-intuitive in a sense because normally one expects to get a bit of growth and then employment follows," Mr Punch said.
"We know it's a conundrum. We're working on it and we'd probably need more data."
The CSO said other countries may have experienced a similar trend.
Finance Minister Michael Noonan said the forthcoming Budget will still be difficult, despite the figures.
"There's no reason to be throwing our hats in the air or anything like that," Mr Noonan said.
"It's still going to be quite a tough Budget."
The minister said he was unable to confirm whether the planned 3.1 billion euro adjustment would be revised down, insisting the Government will need to see more data.
"But it does give us a kind of foundation on which to build the Budget and the strategy for exiting the bailout programme," he said.
"The figures are more or less in line with expectations and there is still a very tough budget coming up."
Mr Noonan added that the "big economic job" between now and Christmas is to exit the bailout programme.
He said this was the key factor to get back into the money markets and that while the Budget is a "significant step", it is a means to an end.
"Now we are positioned with a growing economy, exports at an all-time high, very significant job creation week after week, and that's the way we want to exit the programme, as a very strong economy," Mr Noonan added.