Saturday

10th Dec 2016

Irish economy in surprise decline, threatens debt-cutting plan

  • Personal consumption fell by 0.6 percent in the final quarter of 2013 (Photo: William Murphy)

Ireland's economy suffered a shock decline in the final months of 2013, posting negative growth for the year and casting a pall over the country's full return to the financial markets.

Data from the country's Central Statistics Office (CSO) on Thursday (13 March) indicated that its gross domestic product (GDP) contracted by 2.3 per ent in the fourth quarter, turning a year that had been expected to yield modest growth into a 0.3 percent recession for the year as a whole.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • A surprise decline? Ireland fell back into recession following a sharp fall in the final three months of 2013. (Photo: Paola Farrera)

According to the figures, personal consumption fell by 0.6 percent in the final quarter of 2013, while exports rose 2.1 percent and imports climbed 5.8 percent.

Analysts attributed the decline to the so-called pharmaceutical patent cliff, with a sharp drop-off in revenue from pharmaceutical sales as a number of drugs made in Ireland lose intellectual property protection.

"The numbers show that measured GDP in Ireland fell slightly in 2013. By contrast, labour market conditions are encouraging," said Irish finance minister Michael Noonan.

But the figures are still an unexpected setback. The European Commission expects Ireland's economy to continue its recovery in 2014 and 2015 with GDP growth of 1.7 percent and 2.2 percent respectively. The country's unemployment rate has also started to fall and is now below the 11.9 percent average across the eurozone.

Weaker growth also reduces the prospects of Ireland starting to reduce a debt burden that peaked at 124 percent in 2013, lower only than Portugal, Italy and Greece in the EU. The Commission predicts that Ireland's debt will fall to 121 percent and 119 percent over the next two years.

The news also cast a shadow over Ireland's first full return to the bond markets. Ireland raised €1 billion from 10-year debt on Thursday, in its first auction since it was forced to seek a three year rescue package in September 2010. The auction saw Ireland's borrowing rate fall to a record low rate of fractionally below 3 percent.

Ireland became the first eurozone country to exit a bailout programme last December, after deciding not to request a temporary credit line when its €85 billion rescue finished.

EU asylum return focus expands police scrutiny

EU interior ministers agreed to start legislative talks with the EU parliament to expand the scope of an asylum database, Eurodac, to include migrants and stateless people.

Column / Brexit Briefing

The Brexit picture starts to emerge

The week in Westminster and Brussels highlight the difficulty Theresa May faces in trying to keep control of the Brexit timetable.

News in Brief

  1. Council of Europe critical of Turkey emergency laws
  2. Italian opposition presses for anti-euro referendum
  3. Danish MP wants warning shots fired to deter migrants
  4. Defected Turkish officers to remain in Greece
  5. Most child asylum seekers are adults, says Denmark
  6. No school for children of 'illegal' migrants, says Le Pen
  7. Ombudsman slams EU Commission on tobacco lobbying
  8. McDonald's moves fiscal HQ to UK following tax probe

Stakeholders' Highlights

  1. Swedish EnterprisesHow to Use Bioenergy Coming From Forests in a Sustainable Way?
  2. Counter BalanceReport Reveals Corrupt but Legal Practices in Development Finance
  3. Swedish EnterprisesMEPs and Business Representatives Debated on the Future of the EU at the Winter Mingle
  4. ACCASets Out Fifty Key Factors in the Public Sector Accountants Need to Prepare for
  5. UNICEFSchool “as Vital as Food and Medicine” for Children Caught up in Conflict
  6. European Jewish CongressEJC President Breathes Sigh of Relief Over Result of Austrian Presidential Election
  7. CESICongress Re-elects Klaus Heeger & Romain Wolff as Secretary General & President
  8. European Gaming & Betting AssociationAustrian Association for Betting and Gambling Joins EGBA
  9. ACCAWomen of Europe Awards: Celebrating the Women who are Building Europe
  10. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  11. ECR GroupRestoring Trust and Confidence in the European Parliament
  12. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First