Ireland only bailout state to grow

The latest GDP and balance of payments figures show that the domestic economy is showing signs of stabilising while the export sector continues to grow.

Ireland is the only member of the eurozone bailout countries that is growing and has a current account surplus.

GNP grew by 3.4% over 2012, although it fell by 0.8% over the course of the fourth quarter of the year. GDP rose by 0.9% in 2012, although it was flat over the last quarter of the year.

The main driver of growth was exports for the third year in a row, while imports remained broadly unchanged from the previous year. There was an overall increase of €4.4bn in net exports last year.

There were some signs of stabilisation in the domestic economy. Personal consumption grew by 1% over the last three months of 2012 and it was up by 0.2% over the year. It had been on a downward trend for the previous four years.

However, expenditure on goods and services was down 0.9% last year, although the pace of decline was much slower than previous years. Capital investment fell by 0.1% in the quarter, although it was up 1.2% for the year — the first annual increase in five years.

The CSO also released balance of payments figures, which show that the current account surplus was €2.8bn for the last quarter of the year and €8.09bn for 2012. This compares with a €1.79bn current account surplus for 2011.

Merchandise exports decreased slightly last year, whereas services exports surged over the same period — mainly driven by computer services exports.

“The global economic backdrop continues to remain very challenging for the Irish economy, with key export markets in the eurozone and UK especially weak. As a result, Ireland’s economic recovery is set to be quite subdued for some time yet, and well below growth potential. That said, there is clear evidence that Ireland is weathering the storm better than most and should grow again this year, helped in the main by the country’s robust export sector, especially on the services side. And, a positive out-turn for the third year running in 2013 would be a healthy development... We are forecasting real GDP growth of 1.6% this year,” said Merrion Stockbroker economist Alan McQuaid.