Ireland: Economic growth decelerates slightly in the second quarter
September 10, 2015
In the second quarter, the Irish economy grew 1.9% over the previous quarter in seasonally-adjusted terms, which was slightly below the 2.1% expansion observed in the first quarter. The deceleration, which came in above the 0.7% expansion expected by the market, was driven by a slowdown in the external sector.
Domestic demand rebounded from a 0.4% decrease in Q1 to a 3.7% expansion in Q2. Private consumption grew 0.4% in Q2 (Q1: +0.7% quarter-on-quarter). Government spending improved from Q1’s 1.5% contraction to a softer 0.7% drop in Q2. Finally, fixed investment jumped to a 19.2% increase in Q2, thus contrasting the 1.7% drop seen in the first quarter.
On the external side of the economy, exports strengthened from a 3.0% rise in Q1 to a 5.4% increase in Q2. At the same time, imports accelerated notably from Q1’s 0.4% expansion to a stronger 6.3% rise in Q2, which marked the largest gain since Q3 2005. As a result, the external sector’s net contribution to GDP growth deteriorated from 3.1 percentage points in Q1 to 0.1 percentage points in Q2.
On an annual basis, GDP grew 6.7% in Q2, which came in below Q1’s 7.2% expansion.