Ireland Exits Recession With 0.4% Second-Quarter ExpansionJoe Brennan
Ireland’s economy expanded in the second quarter, exiting its second recession since 2008 when a decade-long real-estate boom imploded.
Gross domestic product rose 0.4 percent from the previous three months, when it fell 0.6 percent, the Central Statistics Office said in a report published in Dublin today. Economists had estimated a 1 percent expansion, according to the median of nine estimates in a Bloomberg News survey. GDP fell 1.2 percent from a year earlier.
Ireland, which is seeking this year to become the first nation to exit a bailout since the euro-region crisis began, has shown signs of recovery in recent months, with payrolls rising and manufacturing and services strengthening. The economy remains weak and the finance ministry said on Sept. 10 there may be “some downside potential” to its 2013 outlook for 1.3 percent growth.
“Today’s numbers will come as somewhat of a relief, but the outturn was still behind expectations,” said Ronan Dunphy, an analyst at Glas Securities in Dublin. “GDP in the first half of the year was 1.1 percent lower than the first half of 2012 and it remains likely that the Department of Finance will lower its forecast.”
Irish bonds rose today, pushing the yield on 10-year debt down 11 basis points to 3.90 percent, the lowest in five weeks.
Ireland’s expansion in the second quarter compares with 0.3 percent for the euro area and 0.7 percent for Germany, the region’s largest economy. In the U.K., GDP also rose 0.7 percent in the period.
Growth in the second quarter was helped by a 4.3 percent increase in exports and a 0.7 percent gain in consumer spending, the CSO said. Imports rose 0.7 percent, while government spending fell 1.3 percent.
Employment in Ireland rose to the highest in almost three years in the second quarter, while a survey published on Sept. 4 showed an index of services increased for a third month in August.
Finance Minister Michael Noonan said today’s data don’t reflect the “strengthening high-frequency data” at the start of the second half of the year.
“Most importantly, monthly Live Register showed falls in unemployment in August,” he said. “In addition, there were increases in national property prices and in core retail sales.”
Gross national product, a separate gauge of economic activity, fell 0.4 percent on the quarter and fell 0.1 percent on the same period last year. GDP excludes profits repatriated overseas by multi-national companies.