Eurozone growth bolsters prospects for huge Irish economic rebound

Ireland's economic figures for the comparable quarter will be released in the coming weeks but it is already clear the uplift will be significant.

The prospects of the Irish economy powering out of the Covid-19 crisis has brightened further after new figures showed the eurozone expanded more sharply than expected, with pandemic-hit Italy and Spain performing remarkably well. 

Eurostat said its initial estimate showed GDP in the 19 countries that use the euro grew 2% since the beginning of April to the end of June from the previous quarter. Compared to the same period a year earlier, when lockdowns to slow the spread of the coronavirus brought economic activity close to a standstill, GDP jumped 13.7%.

Among the outperformers were the eurozone's third and fourth largest economies, Italy and Spain, with quarterly growth respectively of 2.7% and 2.8%. Portugal's tourism-heavy economy expanded by almost 5%. 

Ireland's economic figures for the comparable quarter will be released in the coming weeks but it is already clear the uplift will be significant. 

Revised figures

Two weeks ago, the CSO put out revised figures that showed the economy grew by an even greater extent in the first quarter than first thought. 

Its figures showed GDP growth climbed 8.6% for the first three months of the year compared with the previous quarter, pointing to the potential that the recovery here from the Covid crisis will be exceptionally strong. 

The Department of Finance had in its summer economic statement projected GDP would grow by 8.75% this year but the Economic and Social Research Institute is among the forecasters which predict double-digit expansion. 

In GDP terms, Ireland looks set to be the best performing economy in the eurozone for a second year, underpinned by the performance of the exports of the multinationals that is expected to be bolstered by household spending and the reopening of the economy will help boost Government tax revenues by a significant amount.