Irish economy moves out of recession

Ireland has technically moved out of recession as the country's GDP grew by 0.3% in the three months to end of September.

Ireland has technically moved out of recession as the country's GDP grew by 0.3% in the three months to end of September.

The Quarterly National Accounts, published by the Central Statistics Office in December 2009, showed a 0.3% increase in Gross Domestic Product (GDP) from July through to September 2009.

This is Ireland's first economic growth since the country fell in recession in the beginning of 2008.

Given that the widely-used definition of a recession is two quarters in a row of falling GDP, that means that the Irish economy has now exited recession.

Analysts welcomed the good news but remained cautious about declaring the end to what has been the worse recession since the Second World War.

Irish Business and Employers Confederation's senior economist Fergal O'Brien acknowledged there could be more quarters of negative growth in 2010, but believed "We can now see some light at the end of the tunnel, however, and the economy should begin to grow again around the middle of next year."

"The worst is now clearly behind us. Most sectors of activity are showing signs of stabilisation", said Mr O'Brien.

National Irish Bank’s chief economist Ronnie O’Toole stressed that the economy was making progress and pointed out that "Unemployment has not risen over the last few months, while income tax revenues have been stronger than expected."

Economists predict some sectors of the Irish economy will grow in 2010 -notably exports and consumer spending- but construction and the public sector will continue to suffer.

The export-oriented Celtic Tiger economy was left severely exposed by the global economic crisis at the end of 2007, becoming the first eurozone country to officially enter recession in 2008.

Following the slump of the nation's property market, the Irish Government was forced into making an urgent, costly banking bailout which put Ireland among the most heavily indebted economies in Europe.

In December 9th 2009, the Irish Government announced further cuts in public spending -the third national budget in 14 months- to rebalance the country's finances.

In what was so far the most severe budget in the history of Ireland, the Government announced €4bn worth of public spending cuts in 2010 which are expected to have a knock-on effect on the Irish economy.

Irish Finance Minister Brian Lenihan said "The government's strategy over the last 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets."

As the Irish economy technically moved out of recession, the only European Union member states left to return to economic growth are the United Kingdom, Spain and Greece.