Bloomberg News

Irish Recession Deepened in First Quarter, Economists Say

July 11, 2012

Ireland’s economy may have contracted for a third consecutive quarter in the first three months of the year, as consumers held back on spending and the euro-region debt crisis curbed export growth.

Gross domestic product may have fallen by 0.4 percent in the first quarter from the previous three months, according to the median estimate of eight economists surveyed by Bloomberg. The economy shrank 0.2 percent in the fourth quarter. The figures from the Central Statistics Office, which may include revisions of earlier numbers, will be released at 11 a.m. tomorrow in Dublin.

Irish Finance Minister Michael Noonan forecast in April the economy would expand by 0.7 percent this year after it returned to growth on a full-year basis for the first time in four years in 2011. Yet the weakest patch in global growth since the end of the 2009 recession is threatening Ireland’s export-led recovery, and Irish unemployment has risen to the highest level since 1994.

“First quarter data will most likely show the economy falling again, and that the government’s forecast is out of reach,” said Michael Saunders, an economist at Citigroup Inc. in London, who estimates the economy may have shrunk by 0.7 percent in the first quarter. “It is not because of any failings of the Irish government but the weakness of the euro area economy and the U.K. economy.”

To contact the reporter on this story: Finbarr Flynn in Dublin at fflynn3@bloomberg.net

To contact the editor responsible for this story: Douglas Lytle at dlytle@bloomberg.net


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