30/06/2010

Irish Republic's 'Recession Over'

The recession has officially ended according to the latest Daíl Government figures.

The new data, released by Dublin's Central Statistics Office (CSO) today, showed the value of all goods and services in the country, measured by GDP, grew by 2.7% in the first three months of 2010 compared with the last three months of last year.

However, the CSO figures also showed the growth was largely attributable to multinational companies and exports. The domestic economy continued to disappoint as consumer spending and capital investment fell over the three-month period.

Speaking today, Minister for Finance Brian Lenihan said the economic outlook was looking better than previously expected.

"In the December budget, my Department projected a GDP decline of 1.25 per cent. Today’s figures suggest the prospects for growth this year are somewhat better than previously assumed," he said.

He added: "Today's figures also show that exports are performing strongly, while consumer spending has stabilised. This, coupled with the figures for consumer confidence since April, bode well for the remainder of the year."

Fine Gael Deputy Finance Spokesman Kieran O'Donnell has warned that despite the figures, the ongoing fall in Ireland's national income indicated the economy and labour market is still deeply mired in recession.

Mr O'Donnell said: "The ongoing collapse in investment spending revealed in the CSO's Quarterly National Accounts, and the large rise in unemployment benefit claimants, confirm that the Government's recovery plan is failing. Finance Minister Brian Lenihan and his colleagues are in denial if they think these figures are worth celebrating.

"The 2.7% rise in GDP in the first quarter only reflects the presence of multinational companies based in Ireland. These companies like to declare their profits in Ireland to take advantage of our low corporation tax rate. While higher recorded profits by these firms is welcome, it unfortunately does not reflect the overall health of the real economy and the employment situation.

Exports grew by 6.9% on the last quarter of 2009, the strongest quarter on record. Net exports were up €2.6 billion in the first three months of the year compared with a year earlier.

(DW/BMcC)

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