‘One of the last to leave recession’
Analysts said Ireland will be one of the last locations to emerge out of recession but this should happen towards the end of this year or by early next year.
On an annual basis gross domestic product (GDP) declined by 7.1% last year, which is marginally better than the Government’s budget day 2010 estimate of a 7.5% decline. It was the largest annual contraction on record.
GDP fell by 2.3% in the fourth quarter of 2009 from the preceding quarter, far more than the 0.7% drop expected by economists.
The CSO, which earlier said GDP rose 0.3% in the third quarter from the second quarter, showing Ireland had technically left recession, revised that figure down to a 0.1% fall.
Davy economist, Rossa White said: “There’s no doubt we will be one of the last to leave recession.”
Economists pointed to the strength of exports, which along with a disciplined fiscal policy, would help to differentiate Ireland from other eurozone strugglers in southern Europe.
“If you were to put us against the likes of Mediterranean countries, that’s one metric where we’re doing better,” Mr White said.
Minister for Finance Brian Lenihan said he expects that the economy will resume growing in the second half of the year.
“Internationally in many of our trading partners, there are tentative signs that a modest recovery is underway. The Government have taken actions to ensure the economy is positioned to take advantage of this recovery,” he said.
NCB economist, Brian Devine doesn’t expect job creation to return until 2011.
“In 2010 expect extremely weak domestic demand to counterbalance a large contribution from net exports on the back of global reflation,” he said.
Economists said investment, led by the collapse in the construction sector, continues to be the main drag on the Irish economy.
In Q4, investment declined by 28% year on year, leaving the decline from the peak in Q1 2007 at over 50%.
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