BRUSSELS (MNI) – Ireland’s worse-than-expected second quarter
growth figures were distorted by a spike in imports and must be seen in
context with other indicators that show stabilization, Finance Minister
Brian Lenihan said on Thursday.
Data released earlier Thursday showed Ireland’s gross domestic
product shrank 1.2% q/q in the second quarter, well below expectations
for a 0.4% expansion. The data also showed 1Q GDP growth was revised
down to 2.2% on the quarter from a previously reported +2.7%.
On the year, GDP fell 1.8% in the second quarter the data showed.
“While exports continued to perform well, the weakness is explained
by a surge in imports during the second quarter, and this had a
depressing impact on the overall GDP figure,” Lenihan said in an
e-mailed statement.
He said the spike in imports resulted partly from an increase in
royalty payments.
“The figures for exports are strong and I am encouraged by this,”
he added, saying that it showed Ireland’s competitiveness is improving.
“We must export our way out of our current difficulties; there is
simply no other way,” Lenihan added.
He said the pace of decline in consumption and investment is easing
and that the data must be seen in conjunction with other recent data.
“Labour market data published earlier this week, while remaining
weak, point towards stabilisation, while the public finances to
end-August are on target,” he said.
Lenihan also said that Ireland’s Department of Finance will publish
revised fiscal numbers in early October and updated economic forecasts
in the second half of October.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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