Exports in Ireland lift weak economy

11:30, June 25, 2011      

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Ireland's floundering economy has been lifted by its export market in the first three months of this year, according to figures released by the Central Statistics Office (CSO).

Though exports are doing well, the figures show the country's domestic economy is still suffering, with a drop in gross national product (GNP). Also released were revised figures for 2010, showing an improvement in economic activity during that year.

With the Irish government focusing on an export-led recovery, economic activity, as measured by gross domestic product (GDP), was up 1.3 percent in the first three months of 2011. However, GNP, which excludes profits made by multinationals operating in Ireland, dropped 4.3 percent in the first quarter.

Sectors such as distribution, transportation and communications grew by 1.3 percent in the first three months, while industrial production and construction output saw continued declines of 1.6 percent and 15.4 percent, respectively. Since the property bubble burst in 2007 at the beginning of the economic downturn in Ireland, total investment in construction spending has plummeted, down 60 percent.

Household spending on goods and services, which has fallen 12 percent since 2007, dropped 1.9 percent again in the first three months of 2011. With Ireland's strict budget cuts in the past three years, central and local government spending has also continued to fall, by 1.9 percent in the first quarter.

In a revision of figures for 2010, the CSO also said the economy's performance in 2010 was not as bad as previously estimated. GDP fell by 0.4 percent and the domestic economy actually grew slightly last year.

Ireland's Minister for Finance Michael Noonan said Ireland's debt was fixed but the government had "control over growth" and the figures were consistent with the Department of Finance's own growth figures.

"We need people to go into the shops and start buying again," he said.

Noonan said Ireland was on target to rebuild the domestic economy and this was acknowledged by external partners, adding that opposition to Ireland's interest rate cut was "was being run out the Elysee Palace."

France wants Ireland to increase its 12.5 percent corporate tax rate in return for a one percentage point reduction in the interest charge on its bailout deal with the European Union and International Monetary Fund, but Ireland refuses to budge.

Source: Xinhua
 
 
     
 
 
 
     
 
 
 
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