Ireland: Irish economy expands in 2012 despite fourth quarter stagnation
March 21, 2013
In the fourth quarter, GDP growth was flat over the previous quarter in seasonally adjusted terms. The reading was above the 0.4% decrease observed in the third quarter (previously reported: +0.2% quarter-on-quarter) but below market expectations that had GDP expanding 0.2%. In the full year 2012, the economy grew 0.9%, slightly below the 1.4% increase tallied in 2011.
Domestic demand improved somewhat compared to the previous quarter, as private consumption rose 1.0% in the fourth quarter (Q3 2012: +0.7% qoq). Government consumption, however, fell for the third straight period and contracted 0.7% (Q3: -0.2% qoq). In addition, fixed investment swung from a 5.6% expansion in the third quarter to a 0.1% contraction in the fourth. That said, domestic demand was positively affected by a build-up in inventories.
On the external side of the economy, exports added 0.5% in the fourth quarter (Q3: 0.0% qoq), while imports rose a stronger 0.8% (Q3: +1.9% qoq). Owing to the deceleration in import growth, the external sector's net contribution to GDP growth improved from minus 1.5 percentage points in the third quarter to minus 0.1 percentage points in the fourth.
According to its Q1 Quarterly Bulletin, the Central Bank expects GDP to grow 1.3% in 2013 and 2.5% in 2014. FocusEconomics Consensus Forecast panellists expect the economy to grow 1.1% in 2013, which is up 0.1 percentage points from last month's forecast. For 2014, the panel sees economic growth accelerating to 2.0%.