Irish economy rebounds sharply in first quarter
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.