Shock 2.3% contraction in Q4 dents recovery

Ireland’s economy contracted by a shock 2.3% in the fourth quarter, data showed yesterday, denting a recovery that picked up steam elsewhere.

Despite employment growing strongly as the country left the troika bailout in December, the economy declined sharply in the final quarter from the previous three months as imports surged and consumer spending fell, to scupper forecasts for growth, figures from the Central Statistics Office have shown.

That meant the economy contracted by 0.3% for the year as a whole compared with a government forecast for growth of 0.2%. The country needs growth of 2% from this year on to start reducing one of the highest debt levels in Europe.