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Thursday 18 September 2014

Economy falls back into recession

Published 27/06/2013 | 11:52

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The country is back in recession for the first time since 2009, say Central Statistics Office figures

Ireland is officially back in recession after the Government's planned export-led recovery took a hammering.

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The widest measure of the economy fell both at the end of last year and the beginning of this year with consumer spending also nosediving.

According to the Central Statistics Office, gross domestic product, which includes the multinational sector, was down 0.6% in the first three months of the year and 0.2% in the previous three months. Some figures for last year were revised, meaning the country is officially in downturn for the first time since 2009.

Tanaiste Eamon Gilmore said the news on the jobs front was hugely different from the experience of four years ago. "We are seeing an improvement. We are seeing some recovery but it is still fragile," the deputy prime minister told RTE Radio.

Official job market figures showed there was an increase of 20,500 people in work between early 2012 and early 2013. It had been expected that official GDP figures would show growth of about 1% during 2012, but standard revisions reversed the optimistic outlook.

Records showed homegrown businesses were performing well - 2.9% growth in the first quarter of the year - although the actual value to the wider economy is hard to quantify because of the growing number of foreign businesses domiciled in Ireland for tax reasons.

Budget 2014 takes place in October and will include revised forecasts which will be independently assessed.

The poor figures now rank Ireland's economy in a similar bracket as Spain and Portugal as far as eurozone countries are concerned, despite the Government's hopes that exports would drive recovery.

The report sparked angry responses from anti-austerity campaigners with David Begg, head of the umbrella trade union group Congress, warning there had a series of false dawns. "These figures serve to confirm our worst fears about the policy path being followed. We have an opportunity with the coming budget to signal a significant change of course," he said.

A spokesman for the Department of Finance accepted the numbers are disappointing and blamed a weak global economy for low demand for Irish exports. He suggested the pharmaceutical sector was being affected by the "patent cliff" for medicines and elsewhere one-off factors, such as a new registration system for car sales, were playing a part.

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