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Irish economic recovery fails in second quarter

24 September 2010 11:02 (UTC +04:00)

The surprise news, together with disappointing eurozone manufacturing data, sent stock markets reeling as Ireland became the only European nation -- with the exception of debt-riddled Greece -- to be in contraction.

Gross domestic product (GDP) had been forecast by most economists to continue growing in the three months to the end of June, after the Irish economy escaped from recession in the first quarter.

Ireland was the first eurozone member nation to plunge into recession in 2008, slammed by the global financial crisis, a domestic property market meltdown and soaring unemployment.

It returned to growth with a bang in the first quarter but its wrecked public finances now hang over any recovery.

GDP contracted sharply in the second quarter after growth of 2.2 percent in the first quarter, the Central Statistics Office said.

First quarter growth was revised down from an initial estimate of 2.7 percent, the CSO said. The generally accepted definition of recession is two successive quarters of negative output after at least one quarter of growth.