Ireland: GDP falls sharply in the first quarter
July 12, 2012
In the first quarter, GDP contracted a seasonally adjusted 1.1% over the previous quarter. The drop contrasted the 0.7% increase observed in the fourth quarter (previously reported: -0.2% quarter-on-quarter) and exceeded the 0.4% decline expected by market analysts. Domestic demand improved compared to the previous quarter, as fixed investment grew 11.6% in the first quarter (Q4 2011: +5.6% qoq) and government consumption rebounded from a 3.4% decline in the fourth quarter to a 2.2% expansion in the first. Private consumption, on the other hand, swung from a 1.8% expansion in the last quarter of 2011 to a 2.1% contraction in the first. On the external side, exports accelerated from a 0.4% increase in the fourth quarter to a 2.6% rise in the first. Simultaneously, imports rose 4.9% (Q4: -0.5% qoq). As a result, the external sector's net contribution to GDP growth deteriorated from plus 0.8 percentage points in the fourth quarter to minus 1.1 percentage points in the first. The Central Bank expects GDP to grow 0.5% in 2012 and 2.1% in 2013.
Author: Ricardo Aceves, Senior Economist