Ireland’s Economy Expands for Second Quarter as Spending Rises
Ireland’s economy expanded in the three months through September for a second straight quarter, as consumer spending and exports gained.
Gross domestic product increased 0.2 percent from the second quarter, when it rose a revised 0.4 percent, the Central Statistics Office said in Dublin today. The agency had previously estimated that the economy didn’t grow in the second quarter. Third-quarter growth missed the 0.6 percent median growth estimate of five economists surveyed by Bloomberg News.
The economy expanded 0.8 percent in the third quarter from the year-earlier period. The International Monetary Fund said yesterday Ireland faces “significant risks” to its growth outlook from weakening in the economies of the country’s trading partners and a fifth year of austerity. The government laid out 3.5 billion euros ($4.6 billion) of tax increases and cost- cutting measures earlier this month.
“The worry is obviously you can’t see consumer spending holding up much given the austerity in the budget,” said Alan McQuaid, an economist at Merrion Capital in Dublin. “Clearly, we are the only country that is growing among the peripherals so that helps in our perception abroad with international investors.”
Exports rose 0.3 percent in the quarter, while imports increased 2.1 percent, the statistics agency said. Consumer spending gained 0.5 percent and investment spending climbed 8.5 percent.
Gross national product, a separate gauge of economic activity, fell 0.4 percent in the third quarter from the second quarter and rose 3.7 percent from the year earlier period. GNP excludes repatriated profit from overseas companies.
The IMF is forecasting 1.1 percent growth for the country next year, lower than the 1.5 percent target set by the government. The IMF said yesterday the government should defer any additional austerity measures to 2015 if growth disappoints next year.
The yield on Ireland’s 5 percent security due in October 2020 traded five basis points lower at 4.62 percent.
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