Thursday 22 March 2018

How Ireland slipped back into recession

Irish economy slipped back into recession in the second half of last year due to a drop in exports and Government spending.

Gross domestic product fell 0.2pc from the third quarter, following a 1.1pc drop in the previous quarter.

Two consecutive quarters of shrinking output is defined as a recession and this is the first time since 2008 that this has happened. In contrast, in the 17-member eurozone, GDP dropped 0.3pc in the fourth quarter from the previous three months, when it increased 0.1pc.

Analysts said that it was a year of two halves for Ireland as the first two quarters recorded growth.

And while the economy faces "headwinds," today's data show "tentative stabilisation of domestic spending."

"If Europe catches the flu, it's encouraging that Ireland only sneezed," said Austin Hughes, chief economist at KBC Bank Ireland Plc. The Government currently forecasts the economy to expand 1.3pc this year.

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