Ireland: Economic growth moderates in Q2
September 18, 2014
In Q2, the economy increased 1.5% over the previous quarter in seasonally-adjusted terms. The result was lower than the 2.8% expansion observed in Q1. The increase came on the back of a rebound in fixed investment and government spending, as well as strong exports growth.
Domestic demand picked up from a 1.1% increase in Q1 to a 2.0% expansion in Q2. Private consumption was up only 0.3% (Q1: +0.2% quarter-on-quarter), but government consumption rebounded to a 3.8% expansion (Q1: -1.2% qoq). Moreover, fixed investment surged to a 9.1% increase after having contracted 5.7% in Q1.
On the external side of the economy, exports jumped from a 2.8% increase in Q1 to a 6.4% rise in Q2. At the same time, imports recorded a 6.2% expansion (Q1: +1.7% qoq). As a result, the external sector’s net contribution to GDP growth ticked up from 1.5 percentage points in Q1 to 1.6 percentage points in Q2.
On an annual basis, economic growth increased from 3.8% in Q1 to a surprising 7.7% in Q2, which marked the strongest result since Q1 2007.
Author: Carl Kelly, Economist