Tuesday

28th Mar 2017

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.

Analysis

Lukashenka: End of an era?

The political spring in Belarus ended just as the actual season began, but greater changes loom after 23 years of dictatorship.

Investigation

How the Italian mafia found a Dutch home

One of the biggest mafia trials in Europe in recent years is about to end. Members of the Crupi clan are accused of smuggling vast amounts of cocaine from South America to Italy, using the Netherlands as their main hub.

Stakeholders' Highlights

  1. Belgrade Security ForumCall for Papers: European Union as a Global Crisis Manager - Deadline 30 April
  2. European Gaming & Betting Association60 Years Rome Treaty – 60 Years Building an Internal Market
  3. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  4. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  5. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  6. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  7. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  8. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  9. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  10. Party of European SocialistsWe Must Renew Europe for All Europeans
  11. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  12. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People