Economic pain of the ‘lost decade’ continues to linger

It’s tempting on a day when the CSO delivers headline figures showing that the Irish economy is delivering growth faster than anywhere else in Europe to suggest that the effects of the great slump are at an end.

An annual growth rate of 5.2% last year is eye-catching. And a 1.4% expansion in the first three months from the previous quarter suggests that momentum is strongly building too.

Economists now project that the economy is heading to post growth of 5% this year and possibly will grow again by a further 5% in 2016. That is some recovery.

The stunning 1.4% growth in the first quarter compares with a meagre 0.4% growth recorded across the EU during the same period.

The size of the economy is back at its pre-crash level in 2007.

It was heartening to see that the recovery is broad-based. Drilling down through the figures, analysts could find little fault with an analysis that suggests that most parts of the economy are expanding.

There are, of course, effects that are not captured by yesterday’s figures.

It appears the recovery may be broad-based, but remains strongly centred on the Dublin region. That will lead to its own problems soon enough.

Economists had spoken about the Irish crash producing a “lost decade”. A superficial reading of the CSO figures published yesterday may suggest that the slump has been shorter than once feared.

But other figures published by the CSO starkly show that recovery is far from complete. The size of the economy may now be larger than it was inthe last of the boom years, in 2007, but the per-capita figures tell a less flattering story.

Because the population has been growing, the GDP per-capita last year stood at €40,953. That is still far short of the €42,454 per-capita level of2007. Per-capita GNP was worth €35,260 last year, says the CSO. That is also well short of the peak of €35,657 per person in 2007.

Europe’s strongest recovery is under way. But the statistics also speak ofthe damage inflicted by the crash.