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Irish economy shrinks 1.2 pct, recession grinds on

23 September 2010 23:05 (UTC +04:00)

Baku-APA. Ireland, struggling with a government debt crisis, looks likely to be mired in recession for a third straight year after its second-quarter gross domestic product slid against analysts’ expectations, APA reports quoting news.yahoo.com website.
A Central Statistics Office report Thursday revealed that April-June GDP slumped 1.2 percent. Analysts had expected the economy to grow a further 0.5 percent, building on the first-quarter momentum when GDP grew for the first time since 2007.
Instead, Thursday’s report also revised downward first-quarter growth that had been a source of optimistic government spin. The economy grew 2.2 percent in the January-March period, not 2.7 percent as initially estimated.
"These numbers show that far from having turned the corner earlier this year, the Irish economy suffered a `dead cat bounce’," said Joan Burton, finance spokeswoman for the opposition Labour Party.
Ireland’s second-quarter gross national product also fell 0.3 percent versus the previous quarter. Irish GNP has declined for nine straight quarters. Many economists consider GNP a fairer measure of Ireland’s true economic health because the figure excludes the profits of nearly 1,000 multinationals operating in Ireland that are permitted to export their earnings home.
Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin, called Thursday’s growth figures "disappointing to say the least." He like others had been expecting second-quarter growth of around 0.5 percent and accelerating growth through the rest of 2010.
"All in all, it now looks like Ireland will be posting negative real GDP and GNP growth in 2010 for the third year running, with the positive growth forecasts for next year also set to be lower than previously thought," McQuaid said.