Ireland economy in nosedive

2011-12-16 22:33

kalahari.com

  • Economy
    Helps your child learn about the economy. Now R139.00
    buy now
Dublin - Ireland's economy switched sharply into a downturn in the third quarter, shrinking 1.9% from growth of 1.4% in the second quarter of 2011, official data showed on Friday.

The data indicates that the Irish economy, which was rescued in 2010 by the IMF and EU, is struggling to recover from the depths of the nation's devastating property and debt crisis.

Growth of gross domestic product in the second quarter, or three months to June, was revised down from an original estimate of 1.6%, the Central Statistics Office (CSO) said in a statement.

Massive debt and deficit problems led to an €85bn ($115bn) rescue package for Ireland in November last year, as Dublin fell victim to the eurozone's sovereign debt crisis.

Prior to Friday's grim data release, Ireland had been hailed as an example of how a rescued eurozone country could face up to the consequences of its economic collapse.

Hopes

German Chancellor Angela Merkel had recently praised Ireland as a "superb example" of how a country can work its way out of a debt crisis, as Dublin implements spending cuts and tax rises under its bailout programme.

"Ireland's third quarter GDP figures rather spoil its emerging image as a 'poster boy' for other debt-laden peripheral eurozone economies," said Jonathan Loynes, chief European economist at the Capital Economics consultancy.

"Of course, it would be wrong to read too much into one quarter's figures. The Irish data are notoriously volatile and the third quarter's drop in GDP reverses little more than half of the growth seen in the first half.

"Nonetheless, the figures still put something of a dent in hopes that Ireland was starting to reap the rewards of its economic reforms and austerity measures. With borrowing costs way higher than those of Italy, Ireland's future prospects within the single currency are far from secure," Loynes added.

The Irish GDP figures include output generated by both domestic and foreign companies based in Ireland.

Excluding the foreign contribution, Ireland's gross national product (GNP) shrank by 2.2% in the third quarter, or between July and September. This compared with 0.7% growth in the second quarter.

Conall MacCoille, Davy stockbrokers' chief economist, described the figures as "disappointing," adding: "Exports continue to grow and that trade made a positive contribution to GDP growth so the narrative is more or less the same - export-led growth, weak domestic demand - and the risks looking forward to 2012 are that the slowdown in the euro area will be bad for Irish exports.

"Today's data doesn't really change that story but nonetheless they are a little bit weaker than expected."

Ireland's austerity budget last week estimated that GDP growth this year will be 1%. It predicted 1.3% growth in 2012, down from the government's previous estimate of 1.6% in a November fiscal plan.

The €3.8bn austerity budget aims to bring the country's deficit down to 8.6% of GDP in 2012. The government has pledged to bring the deficit below 3% of GDP by 2015.
Read more on:    ireland  |  economy
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
3 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/Oscar Pistorius
 

6 impressive camping tips

Check out these great tips that will make your camping experience so much better!

 
 

Where were you when you last felt alive?

Free outdoor yoga classes
Watch: 5 skills to improve your BMX riding
Action camera for all occasions
Tips on how to set your fitness goals

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Save up to R1000 on Hisense smartphones!

View the large range of Hisense smartphones. Buy today and save up to R1000!

Deal of the week!

Save R1200 on the Samsung 48” smart full HD LED television now only R8799. Buy now!

Toys 4 for the price of 3

Buy 4 toys and get the cheapest FREE! Offer valid while stocks last. Shop now!

Mind blowing prices – As seen on TV

Get mind blowing prices on 1000’s of products! Shop now.

Save 20% on Nivea beauty products!

Buy any two Nivea beauty products and save 20%. Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

There is a strong social and romantic overtone that plays its way into your day. It may get stronger later in the day when the...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.