Ireland

Economy sees sharp slowdown at end of 2007

Ireland's economy grew strongly last year but slowed significantly in the last quarter, data released by the Central Statistics…

Éanna Ó Caollai
Thu Mar 20 2008 - 00:00

Ireland's economy grew strongly last year but slowed significantly in the last quarter, data released by the Central Statistics Office showed today.

Unfortunately we know that a lot has changed in recent months and 2008 is going to be a much more challenging year for the Irish economy
IBEC Senior Economist Fergal O'Brien

Growth in Gross Domestic Product (GDP) was 5.3 per cent in 2007 -  compared with 5.7 per cent the previous year.

However, figures  show a significant slowdown in the last quarter of 2007.  During that period, growth in GDP fell to 3.5 per cent at constant prices compared with the same period in 2006 while the corresponding growth in GNP was just 1.2 per cent.

The growth in Gross National Product (GNP), which excludes profits of foreign-owned enterprises, was 4.5 per cent for the whole of 2007.

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Growth in capital investment, while 0.2 per cent higher in 2007 than in 2006, recorded a significant fall of 12.3 per cent in the last three months of the year.

Consumer spending remained strong however, with a 5.4 per cent increase in 2007 compared with the previous year.

While the volume of output of Industry (including construction) increased by 6.9 per cent in 2007 compared with 2006, the output of the construction sector decreased by 1.1 per cent for the year 2007 and declined by a further 8.8 per cent in the last quarter of 2007.

The figures showed strong performance in trading with emerging economies with a 21 per cent increase in exports of goods to those countries.

Net Exports (exports minus imports) in constant prices were €3,838 million higher in 2007 compared with 2006.

Commenting on the CSO data IBEC Senior Economist Fergal O'Brien said "Overall 2007 was another exceptionally strong year for the Irish economy. A significant rebalancing took place as the traded sector of the economy compensated for a slowdown in the building sector."

"Unfortunately we know that a lot   has changed in recent months and 2008 is going to be a much more challenging year for the Irish economy," he continued.

"Signs of this slowdown are also evident in the final quarter numbers for 2007 - new housing output fell by 22%, while consumer spending growth slowed from 6.3% in Q3 to 4.4% in Q4," Mr O'Brien said.