Ireland

RGE's Q1 2010 Ireland Outlook

The Irish economy entered the current recession in 2008, driven by a sharp contraction of the housing sector, and will continue to witness falling y/y GDP in 2010. While the Irish economy grew 0.3% q/q in Q3 2009, all components of GDP continued their downward trend with domestic demand proving particularly fragile. Positive growth was largely driven by net exports, which contributed favorably on the back of a sharp fall in imports. Compared to the same quarter one year ago, Irish GDP still declined 7.4% y/y in Q3 2009. While the economy remains weak, the sharp economic contraction has started to ease and the bulk of economic adjustments, for instance in the housing sector, have already taken place. Although the external sector will drive growth in 2010 on the back of a rebound in global trade and Ireland’s restored export competitiveness, its contribution will not prove strong enough to counter the ongoing deterioration in domestic demand. The economic recovery will be gradual at best in light of rising unemployment, the strong euro, the government’s fiscal austerity plan and the ongoing difficulties in the banking sector.

Read the Q1 2010 Ireland Outlook.