Figures show recession ended at start of year

THE recession officially ended at the start of the year, new figures have revealed.

According to the Central Statistics Office (CSO), the value of all goods and services in the country, measured by GDP, grew by 2.7% in the first three months of 2010 compared with the last three months of last year.

GDP fell by a record 7.1% last year, the largest decline in output recorded in a single year.

Exports of goods and services were up 6.9% in volume terms in the period and will be the key driver this year of economic growth, now expected to show an increase of 1%.

The quarterly increase in January-March this year was the first since the final quarter of 2007.

Bloxham Stockbrokers economist Alan McQuaid said the numbers are very encouraging and augur well for a return to good growth form 2011 onwards.

The consensus is for GDP growth of about 3% in 2011, which does not look particularly ambitious in the light of the new data, said KCB Bank economist Austin Hughes.

While there was a technical end to recession, conditions remained tough and domestic demand remained weak, he said.

Other figures from the CSO show the balance of payments current account deficit for the first three months of 2010 was €1.622 billion.

That was more than €1.1bn lower than the deficit of €2.738bn for the same time last year.

For the 12-month period, however, GDP shrank by 0.7%, while GNP dropped by 4.2%.

Consumer spending in the first quarter was down 0.8% from a year earlier, the smallest dip for two years.

The CSO figures show industrial production showed growth of 7.7% compared with a year earlier, despite a 35% fall in construction output.

Capital investment remained weak, dropping by 30% from a year earlier, and is expected to stay that way for the rest of the year, reflecting the severe impact of the credit crunch and the banking crisis.

Trade contributed €2.6bn more to growth than in the same period last year.

Goodbody economist Deirdre Ryan said a “robust” performance by exports was the highlight of the figures.

Weakness in the euro should help further boost exports the months ahead, she said.

Kieran O’Donnell, deputy finance spokesman for Fine Gael said the latest statistics on unemployment show the economy was “still mired in recession”.

“The latest Live Register figures saw a seasonally adjusted rise of 5,800, and an unadjusted rise of 14,690.

“And unemployment now stands at 13.4%, the second highest in the eurozone behind Spain,” he said.


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