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Thursday, June 27, 2013

Ireland slips into recession as bailout exit looms








Gross domestic product shrank 0.6pc in the first quarter of this year from the previous three months, confounding analysts' expectations of 0.3pc growth - a shock reading that shows the euro member is recovering from financial crisis much more slowly than previously thought.

Revised data also showed a quarterly contraction of 0.2pc in the fourth quarter of 2012, meaning Ireland's economy has shrunk for three successive quarters and is in its first recession since 2009.

"It clearly shows that we're not immune to what's going on globally. Given these numbers you'd be hard pushed to have growth for the year as a whole," said Alan McQuaid, economist at Merrion Stockbrokers.

Ireland has been one of the few eurozone countries to have eked out mild growth as the currency bloc's debt crisis has unfolded, despite harsh spending cuts and tax hikes imposed to help bring down one of Europe's highest budget deficits.

Though Irish people have not protested against austerity as angrily as those in other indebted states such as Greece and Spain, many have endured salary cuts of up to a fifth and big tax rises. Unemployment has more than tripled to 14pc.


Telegraph

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