Oliver Mangan: The two Irish economies of the Covid-19 crisis puts focus on budget in October              

The focus is now on Finance Minister Paschal Donohoe's budget next month. File picture: Brian Lawless/PA

Irish GDP had been widely forecast to fall by between 7% and 10% this year, broadly in line with the eurozone and UK. However, the recent Irish national accounts data for the second quarter of the year, when much of the economy was in lockdown, point to a much smaller decline. This is largely due to the continuing strength of exports, most notably in the pharma sector and computer services.

Irish GDP fell by 6.1% in quarter two following a decline of 2.1% in the first quarter. Thus, the economy entered recession. However, this 6.1% contraction is much smaller than the declines of 11.8% and 20.4% recorded in the eurozone and UK for the same quarter. The smaller Irish fall is a surprise given the extent and duration of the lockdown in Ireland during the second quarter.