Irish Economy Set for Best Year Since 2000, Boosting Kenny's Bid

Deep Dive: U.S. Money Funds, Ireland's GDP Growth
  • Economy grows 7 percent in third quarter on annual basis
  • Prime minister Kenny to base re-election campaign on economy

Ireland’s economy expanded 7 percent in the third quarter, an annual pace expected to give the nation its highest growth since 2000 and boost the government as it prepares for national elections early next year.

Gross domestic product rose more than four times the euro area’s 1.6 percent yearly expansion for the same period, while second-quarter growth was revised slightly upward to 6.8 percent, the Central Statistics Office said in Dublin on Thursday. The economy was expected to grow 6 percent, according to the median forecast in a Bloomberg survey of five economists.

“It is looking like the aggregate 2015 figure will be closer to 7 percent than the 6 percent,” said Anders Moller Lumholz, chief sovereign debt analyst at Danske Bank A/S in Copenhagen. 
 
Austin Hughes, an economist at KBC Groep NV’s Irish unit in Dublin, said the economy is on track for its strongest performance since 2000, when it registered 10.2 percent expansion.

Nation’s Recovery

Prime Minister Enda Kenny, who faces an election within four months, will base his campaign for a second term on the nation’s recovery from the worst recession since at least 1945. Ireland’s economy is on track to be the fastest growing in the euro-region for a second straight year, the European Commission forecast last month.

GDP rose 1.4 percent in the third quarter compared with the previous three months, the CSO said.

To an extent, gross domestic product figures offer a misleading impression of the economy, as the national accounts are distorted by the activities of companies such as Google Inc. and Facebook Inc. operating in Ireland. Still, employment is growing about 3 percent a year, indicating the economy is outpacing the rest of the euro-region.

Personal consumption rose 3.6 percent in the quarter from the year-earlier period, while exports rose 12 percent, the statistics office said.

“Recent PMI and consumer confidence trends indicate that this stellar performance is also likely to have carried through into the fourth quarter,” Goodbody Stockbrokers economist Juliet Tennent said in an e-mail.

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