Ireland: Economic growth stalls in second quarter
September 20, 2012
In the second quarter, GDP growth was flat over the previous quarter in seasonally adjusted terms. The reading contrasted the 0.7% decline observed in the first quarter (previously reported: -1.1% quarter-on-quarter) but was below market expectations that had GDP expanding 0.7%. On an annual basis, the economy fell 1.1% over the same quarter last year (Q1: +2.1% year-on-year). Domestic demand deteriorated significantly compared to the previous quarter, as fixed investment swung from a whopping 26.5% expansion in the first quarter to a 29.4% decline in the second and government consumption contracted 3.9%, contrasting the 1.5% rise in the first quarter. Moreover, private consumption continued to decline and fell 0.4% over the previous quarter (Q1: -1.9% qoq). On the external side, exports deteriorated from a 2.0% increase in the first quarter to a 0.5% decrease in the second. Simultaneously, imports fell 5.2% (Q1: +5.7% qoq). As a result, the external sector's net contribution to GDP growth improved from minus 2.4 percentage points in the first quarter to plus 3.8 percentage points in the second. The Central Bank expects GDP to grow 0.7% in 2012 and 1.9% in 2013.