Ireland: Economy gains steam in the last quarter of the year
March 12, 2015
According to preliminary data, in Q4 the economy increased 2.7% over the previous quarter in seasonally-adjusted terms, which followed the 1.5% expansion observed in Q3 2015 and marked the highest reading since Q3 2013. According to the Central Statistics Office, the result was driven by a recovery in the external sector and expansion of private consumption.
Domestic demand rose 1.2% in Q4, which marked a softer expansion than the 2.4% increase tallied in Q3. Private consumption grew 1.0% (Q3: +0.8% quarter-on-quarter), and government spending advanced from Q3’s 1.8% decline to a milder 1.4% contraction in Q4. Conversely, fixed investment slowed from a 4.8% increase in Q3 to a weaker 2.9% rise in Q4.
On the external side of the economy, exports accelerated from a 2.6% rise in Q3 to a 3.4% increase in Q4. At the same time, imports recorded a 2.5% expansion (Q3: +5.4% qoq). As a result, the external sector’s net contribution to GDP growth improved notably from minus 2.3 percentage points in Q3 to plus 1.5 percentage points in Q4.
On an annual basis, GDP growth accelerated from the 7.2% tallied in the previous quarter to 9.2% in Q4. Q4’s print is the highest reading since Q1 2001. In the full year 2015, the economy expanded 7.8%, which marked a notable improvement over 2014’s 5.2% expansion and was the largest gain since 2001. The result, which overshot the Central Bank’s expectations of 6.6% growth, evokekes the growth rates tallied during the Celtic Tiger era.