Economy grew just 0.4% in Q4

Ireland’s economy probably grew by 0.4% in the last quarter of 2013 and more robust growth is expected for 2014 as the labour market gains momentum and exports improve, a Reuters poll showed yesterday.

Ireland’s economy has begun the year on a positive note, after completing an international bailout. Unemployment has fallen below the eurozone average and consumer sentiment is near a seven-year high.

The economy grew by a better-than-expected 1.5% in the third quarter, but sluggish exports probably held quarterly growth to 0.4% in the fourth quarter, economists polled by Reuters forecast before a report on gross domestic product is released this week.

Annual growth is still set to rise to 2.1% this year from 0.3% in 2013, according to the median forecast of 10 economists. That is enough to start reducing one of the highest debt levels in Europe.

“Irish goods exports fell further in the final quarter of 2013 after slowing in the third quarter. This does not bode well for fourth-quarter GDP growth, given that exports are the key driver of the economy,” said Melanie Bowler, economist at Moody’s Analytics.

“However, a more upbeat outlook for Irish exports in 2014 is good news for the economy. The UK and US are forecast to grow robustly, and improvement is expected for the eurozone,” Ms Bowler said.

In a busy period for earnings, some of Ireland’s largest listed companies expressed confidence last week that the upturn under way was sustainable. A slowdown in growth abroad was the chief risk they saw to halting momentum.

The prospects outside Ireland are also looking brighter.

Eurozone private businesses grew at the fastest pace in more than two and a half years last month. The economists see exports rising by 4% this year, compared with a prediction for growth of 3.4% in the last poll in January.

Ireland’s labour market has been improving faster than expected. Data last week showed the unemployment rate had dropped below the eurozone average, after falling under 12% for the first time since April 2009.

Having forecast a year ago that unemployment would fall to 12.6% by the end of 2015, the economists now see the rate dropping to 10.2%, leaving Taoiseach Enda Kenny on course to meet his goal of driving it under 10% before the next general election, scheduled for April 2016.

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