LONDON, UK – Ireland slid back into recession in the last three months of 2011, official figures released Thursday show, as a weak global economy hit Irish exports and the government’s austerity program kept domestic demand depressed.
Data from the Central Statistics Office showed that the country’s economy shrank by 0.2 percent, following a contraction of 1.1 percent in the third quarter, meaning that Ireland experienced a recession under the definition of two successive quarters of declining gross domestic product (GDP), The Wall Street Journal reports.
The last time the Irish economy shrank for two straight quarters was in late 2009. While consumer spending rose by 0.5 percent in the final quarter of last year, exports fell by 1.1 percent.
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Thursday’s figures overshadowed data showing that Irish GDP grew by 0.7 percent in 2011 as a whole, bringing an end to three years of declines since the financial crisis began in the country.
However, that still fell short of Irish government expectations of a 1 percent rise, and Ireland, almost half way into a three-year bailout program, needs growth to accelerate by three times the 2011 total next year if it is to meet targets set by its international lenders, according to Reuters.
In November 2010, the International Monetary Fund and European Union provided Ireland with $112 billion worth of emergency loans to tackle huge debts and borrowing costs after Dublin bailed out banks left with huge liabilities after a property bubble burst.
According to Ireland’s RTÉ News, Thursday’s figures reveal that building and construction recorded the greatest decline in activity in 2011, falling 13.5 percent, while industry and agriculture were the main contributors to growth.
On Wednesday night Ireland’s finance minister Michael Noonan said the government was in negotiations with the European Central Bank to delay a cash payment of $3.1 billion due on March 31 on Ireland’s bill for pumping promissory notes into two failed banks, Anglo Irish and Irish Nationwide, The Irish Times reported.
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