Ireland: Economy registers highest quarterly growth since Q2 2011
December 19, 2013
In Q3, the economy grew 1.5% over the previous quarter in seasonally-adjusted terms. The expansion followed the 1.0% increase observed in Q2 and overshot market expectations of a 0.6% rise in GDP. This marks the highest quarterly reading since Q2 2011. Moreover, on an annual basis, the economy rebounded and rose from a 1.6% contraction in Q2 to a 1.7% expansion in Q3.
The expansion in Q3 compared to the previous quarter was driven by improvements in domestic demand. Fixed investment surged to 10.9% growth in Q3 (Q2: +1.2% quarter-on-quarter). Government consumption rebounded from a 0.9% decrease in Q2 to a 1.1% increase in Q3 and private consumption increased 0.9% (Q2: +0.7% qoq).
On the external side of the economy, exports tumbled from a 4.6% expansion in Q2 to a 0.8% contraction in Q3. Imports also deteriorated, falling 0.3% (Q2: +0.6% qoq). As a result, the external sector's net contribution to GDP growth fell from plus 4.2 percentage points in Q2 to minus 0.6 percentage points in Q3.
According to its Q4 Quarterly Bulletin, the Central Bank expects GDP to grow 0.5% in 2013 and 2.0% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 0.1% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel sees economic growth accelerating to 1.8%, which is also down 0.1 percentage points from last month's projection.
Author: Carl Kelly, Economist