Ir­ish econ­omy re­bounds sharply in first quar­ter

Kathimerini English - - Business & Finance -

DUBLIN (Reuters) – Ire­land’s econ­omy re­bounded sharply in the first quar­ter as strong ex­ports and prof­its from Ir­ish-based multi­na­tion­als com­pen­sated for flag­ging con­sumer de­mand in one of the coun­tries worst hit in the eu­ro­zone’s debt cri­sis. Ire­land needs solid eco­nomic growth over the medium term if it is to per­suade skep­ti­cal in­vestors it can shoul­der a debt bur­den which has quadru­pled on the back of a bank­ing col­lapse and avoid fol­low­ing Greece into a sec­ond bailout from the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund. Gross do­mes­tic prod­uct jumped 1.3 per­cent in the first quar­ter on a sea­son­ally ad­justed ba­sis, far ex­ceed­ing ex­pecta- tions for a 0.8 per­cent in­crease, pre­lim­i­nary data yes­ter­day showed. But econ­o­mists cau­tioned that the jump from a re­vised drop of 1.4 per­cent the pre­vi­ous quar­ter was more to do with ex­ter­nal de­mand than any re­cov­ery at home. Con­sumer de­mand dropped 1.9 per­cent in the quar­ter, the worst in two years. “Over­all the num­bers con­tinue to in­di­cate that we’re bounc­ing along the bot­tom. There’s no real signs of growth in the econ­omy over­all in the short term be­cause of the drag of do­mes­tic de­mand,” said Der­mot O’Leary, econ­o­mist with Good­body Stock­bro­kers. “We’ve an econ­omy which is go­ing to be flat this year, GDP could be slightly up and GNP slightly down. I think the gov­ern­ment are too op­ti­mistic.” Ire­land’s gov­ern­ment, which is tar­get­ing av­er­age eco­nomic growth of around 2.3 per­cent be­tween 2011 and 2014, wants to make a ten­ta­tive re­turn to debt mar­kets late next year but cur­rent mar­ket con­di­tions sug­gests that will be a tall or­der.

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