Ireland's Economy Continues to Surge as Recovery Gains GroundBy
Irish gross domestic product expanded annual 6.7% y/y in 2Q
Ireland's rating may be upgraded by Moody's later this week
Ireland’s economy continued to expand in the second quarter on exports and investment, prompting Finance Minister Michael Noonan to raise his outlook for this year.
Gross domestic product rose an annual 6.7 percent, compared with a 7.2 percent pace in the first three months of the year, the Central Statistics Office said on Thursday. The economy was expected to expand by 5.1 percent, according to the median forecast in a Bloomberg survey of three economists.
Speaking to reporters in Dublin, Noonan said cheaper oil and European Central Bank stimulus will help the economy grow about 6 percent this year, faster than the 4 percent previously estimated. It puts Ireland on course to be the fastest-growing economy in the euro region this year. The debt office on Thursday sold 1 billion euros ($1.1 billion) of 2030 bonds at an average yield of 1.82 percent, compared with 2.22 percent at a June auction.
The economy “continues to grow strongly,” Goodbody Stockbrokers said in a note, adding that domestic demand trends were “particularly impressive.”
The country may reclaim an A-grade across the three main credit ratings firms on Friday, with Moody’s Investors Service seen raising its stance by one level to A3, according to Dublin-based Cantor Fitzgerald LP analyst Ryan McGrath.
Noonan said the ratio of government debt to GDP will fall below 100 percent by year end, a year earlier than expected. It peaked at 123 percent in 2013 after the financial crisis plunged Ireland into its worst recession on record.
GDP rose 1.9 percent in the second quarter compared with the previous three months, the CSO said. Household spending increased 0.4 percent, government spending dropped 0.7 percent and gross capital formation rose 19 percent. Exports climbed 5.4 percent, while imports gained 6.3 percent.
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