The Irish economy grew just 0.1 percent in the third quarter but the country is still set to be the fastest-growing economy in Europe this year, recent data shows.
That was weaker than some analysts expected, but a surge in gross domestic product in the first six months of the year means little if any quarter-on-quarter growth is now needed to meet government projections for GDP to expand almost 5 percent this year.
“Today’s data confirm the economy has expanded at a rapid pace in 2014 – although not quite as strong as the exceptional breakneck 6 percent plus some had expected,” said Conall Mac Coille, chief economist at Davy Stockbrokers.
“This confirms we are on course to be the fastest economy in Europe,” said Mac Coille.
Despite the low quarter-on-quarter figure, the economy grew 3.5 percent compared with the same quarter last year, the data showed. After exiting its EU/IMF bailout last year, Ireland has been outperforming the rest of the euro zone, where growth is faltering.
It was the third straight period of quarterly growth following an expansion of 1.1 percent from April to June that saw GDP rise a hefty 7.3 percent year-on-year, the Central Statistics Office (CSO) said on Thursday, revising the figures down a touch.
The government’s austerity drive has helped get the economy back on track, but it has also tested the public’s patience. Tens of thousands of people marched on parliament on Wednesday to protest against the final round of government measures, frustrated at feeling no effect of the recovery they are hearing so much about.
The uneven nature of the recovery was demonstrated in a breakdown of the figures, which showed personal consumption was flat year-on-year having contracted in the second quarter, while exports and investment soared.
A number of economists said the data was surprising given that retail sales volumes rose by almost 5 percent in the third quarter and consumer confidence hit a seven-year high.
Thursday’s data means the economy has grown 4.9 percent year-on-year so far this year, the CSO said, a figure finance minister Michael Noonan said kept the government on track to meet its 2014 targets.
The better-than-expected growth in the first half has allowed the government to cut income tax from next month, the first reversal of the austerity drive that began in 2008 and intensified under the bailout programme that Ireland completed last year.
The government wants to bring in further tax cuts in a year’s time, as protests grow 15 months ahead of a parliamentary election. But it will need continued momentum in the economy to do so. Source: Reuters