Ireland: Economic growth resumes in third quarter
December 16, 2010
In the third quarter, gross domestic product (GDP) grew a seasonally adjusted 0.5% over the previous quarter, according to the Central Statistics Office (CSO). The acceleration contrasted the 1.0% contraction recorded in the second quarter (previously reported: -1.2% quarter-on-quarter). However, the expansion came in below market expectations that had the economy adding 0.8% in Q3. On an annual basis, the economy contracted 0.5% in the third quarter, which marked an improvement compared to the 1.8% decline recorded in the second quarter. Private consumption rose 0.5%, contrasting the second quarter's 0.1% drop. However, fixed investment fell 18.1% over the previous quarter, contrasting the 10.5% increase recorded in Q2 and thus mitigating the positive impact of stronger consumption. The contribution from the external sector improved. Exports grew 3.7% in the third quarter (Q2: +2.0% quarter-on-quarter), while imports increased 1.4% (Q2: +4.6% qoq). As a result, the net contribution from the external sector rebounded from minus 1.5 percentage points in the second quarter to add 2.3 percentage points in the third quarter. The Central Bank expects the economy to grow 0.2% this year. In 2011, monetary authorities see growth picking up to 2.4%.