Ireland officially out of recession

Grafton StThe recession in Ireland has officially ended.

After a downturn hit the country at the end of last year and the first few months of this year, the widest measure of the economy has now revealed a slight upturn.
%VIRTUAL-SkimlinksPromo%According to estimates from the Central Statistics Office, gross domestic product, which includes the multinational sector, increased in the three months to June by 0.4% compared to the first three months of the year.

The figures will be a boost for the Government as it prepares Budget 2014, which is to be announced on October 15.

But despite one set of good figures, the domestic economy is suffering as it contracted by 0.4% in the same period.

Among the good returns for the country, there were signs of growth and improvement in shattered building and construction businesses.

The sector has reported growth of 4.2% from March to June.

The revival will go some way towards alleviating the impact of massive unemployment caused by the 170,000 builders who lost jobs in the wake of the property collapse from 2007.

Other improvements which have helped spark another recovery include a 1.5 billion euro increase in exports and people spending more - up 0.7% on the first three months of the year.

Businesses involved in distribution, transport, software and communication increased by 1.4%.

The Irish economy was in recession throughout 2008 and 2009 before recovering slightly and then dipping again at the end of last year and start of this year.

Aidan Punch, CSO assistant director general, warned against reading too much into small changes in economic figures.

"All of these are very minor changes - very, very minor changes. So it's important not to read too much into it," he said.

Mr Punch said it was a "conundrum" that GDP has fallen year-on-year while employment rates seem to have increased.

"They nearly seem counter-intuitive in a sense because normally one expects to get a bit of growth and then employment follows," Mr Punch said.

"We know it's a conundrum. We're working on it and we'd probably need more data."
The CSO said other countries may have experienced a similar trend.

Finance Minister Michael Noonan said the forthcoming Budget will still be difficult, despite the figures.

"There's no reason to be throwing our hats in the air or anything like that," Mr Noonan said.

"It's still going to be quite a tough Budget."

The minister said he was unable to confirm whether the planned 3.1 billion euro adjustment would be revised down, insisting the Government will need to see more data.

"But it does give us a kind of foundation on which to build the Budget and the strategy for exiting the bailout programme," he said.

"The figures are more or less in line with expectations and there is still a very tough budget coming up."

Mr Noonan added that the "big economic job" between now and Christmas is to exit the bailout programme.

He said this was the key factor to get back into the money markets and that while the Budget is a "significant step", it is a means to an end.

"Now we are positioned with a growing economy, exports at an all-time high, very significant job creation week after week, and that's the way we want to exit the programme, as a very strong economy," Mr Noonan added.
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