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Strong GDP Growth From Ireland

James Boston
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Strong GDP Growth From Ireland

There are signs of growth on the Eurozone peripheries as evidenced by the final first quarter GDP figure out of Ireland this morning. The Irish economy had been gradually returning to life after the being devastated by the economic crises and an ensuing large scale domestic banking collapse. However Q4 of last year provided an unexpected return to economic contraction, this makes today’s GDP growth figure for Q1 all the more welcome. The 4.1% year on year GDP growth number is major turnaround from the -0.7% fall seen in the previous quarter.

Additional good news for Ireland came in the form of a further pickup in the Services sector of the economy, this morning’s Purchasing Managers Index for this area of the Irish economy reached it’s highest level in over 7 years as both sales and employment increased in the sector.

Post bail out Ireland is facing into yet another EU/IMF inspired austerity budget at the start of Q4 this year. In order to remain within EU guidelines there is a need for further spending cuts of up to €2Bn, efforts are underway to reduce this figure prior to the budget and it was yesterday reported that the first half of 2014 provided an unexpected additional €500m in tax revenue.

The Irish economy proved very vulnerable during the recent economic crises, it’s lack of scale and it’s open nature made it difficult to insulate the economy from global events. This however works two ways, the current global pick up appears to be exerting a strong positive influence on the Irish economy. The faltering Eurozone is obviously hampering growth, as is the lack of necessary stimulus from the European Central Bank, but traditionally Ireland has had strong trade links with it’s near neighbour, the UK, and this is having contributing to current return to economic growth.

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