herald

Wednesday 19 December 2018

'Beast from the East' blamed as Irish economy shrank in first three months of this year

* Economists blame heavy snow for dampening activity

Winter weather Mar 18th 2018
Winter weather Mar 18th 2018

The Irish economy shrank in the first quarter of the year, in stark contrast to the popular image of booming growth.

Amid a backdrop of Brexit and global uncertainty, Irish GDP decreased 0.6pc in the period, the Central Statistics Office (CSO) said.

Personal consumption of goods and services, described by the CSO as "an important measure of domestic economic activity", was also down, with a reduction of 0.3pc.

However, many economists blamed the heavy snow for dampening activity, along with a natural post-Christmas reduction in spending, and said the bigger picture was of a fast-growing economy.

GDP is also not seen as a particularly reliable indicator of Irish growth, because it includes activity by multi- nationals which does not always reflect what is happening on the ground.

While the Beast from the East may have caused havoc for some businesses, it provided a huge boost to the grocery market.
While the Beast from the East may have caused havoc for some businesses, it provided a huge boost to the grocery market.
The Beast from the East left tens of thousands without a water supply after frozen pipes thawed and cracked (Owen Humphreys/PA)
Enjoying the snow in the Phoenix Park, Dublin. Photo: Colin Keegan, Collins Dublin.
Footpaths are cleared in Kildare Town, Co Kildare - Niall Carson/PA Wire 1/3/2018
Empty streets in Dublin

Finance Minister Paschal Donohoe said he was not "at this point" concerned about the numbers, but he was "not taking anything for granted".

"If I look at the trends that we've had in tax collection for this year, it all points to the growth targets that we had for this year being fully delivered," he said.

The minister added that income tax receipts in particular were pointing towards growth expectations being met.

Despite the positive reception of the figures, analysts have also warned about the potential for external events - such as Brexit or the trade disputes involving the US - to have a negative impact on the Irish economy.

exposure

In a report on the eurozone issued yesterday, the International Monetary Fund (IMF) said Ireland would be the country hit hardest by Brexit.

Sheep keeping an eye out for the Beast from the East. Pic Steve Humphreys
Sheep keeping an eye out for the Beast from the East. Pic Steve Humphreys
James Byrne, from Kildare Civil Defence, delivers bread and milk to people trapped by the snow during the ‘Beast from the East’ storm. Photo: Damien Eagers
The Beast from the East brought unseasonal weather to the country. Photo: Fergal Phillips

It flagged a recent study that said Ireland was the only country in the EU facing Brexit exposure levels similar to UK regions.

Mr Donohoe said yesterday that the reason the Government is planning to increase capital expenditure is to guard against the impact of Brexit.

"While we do face great uncertainty and difficulty dealing with all of this, it would clearly be vastly higher if the jobs market had not improved to the extent that it had," he added.

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