Ireland: Economic growth speeds up in Q1 on recovery of external sector
July 30, 2015
In the first quarter of this year, the Irish economy increased 1.4% over the previous quarter in seasonally-adjusted terms, which followed the milder 1.2% expansion observed in Q4 2014. The acceleration, which fell slightly short of the 1.5% expansion expected by the market, was driven by a recovery of the external sector.
Domestic demand deteriorated from a 3.5% increase in Q4 to a 1.2% contraction in Q1. Private consumption grew 1.2% (Q4: +1.3% quarter-on-quarter). Government spending swung from Q4’s 3.1% growth to a 0.4% contraction in Q1. In addition, fixed investment deteriorated from a 4.1% increase in Q4 to a 3.1% drop in Q1.
On the external side of the economy, exports strengthened from a 1.1% rise in Q4 to a 2.3% increase in Q1. At the same time, imports decelerated notably from Q4’s 3.2% expansion to a milder 0.6% rise in Q1, which marked the smallest gain in nearly two years. As a result, the external sector’s net contribution to GDP growth recovered markedly from minus 1.9 percentage points in Q4 to plus 2.1 percentage points in Q1.
On an annual basis, GDP grew 6.5% in Q1, which exceeded Q4’s 6.0% expansion.