Irish economy in recession
Published 25/09/2008 | 12:27
The Republic's economy is in recession after shrinking for a second quarter in succession.
Irish gross domestic product (GDP) shrank by 0.5% in the second quarter compared with the previous three-month period, according to data from the Central Statistics Office.
The Department of Finance pointed to the crumbling property market and the international credit crunch as causes for the downturn in the economy.
A Government spokesman said: "As expected, lower levels of new house building had a major restraining influence on growth in the second quarter, as is evident from the very weak investment figures.
"Other factors at work include higher commodity prices, global financial market problems, weak demand in our major trading partners and adverse exchange rate movements."
It is the first time Ireland has experienced a recession since 1983.
Technically, a recession is defined as two or more successive quarters of negative growth.
Seaking before today's report, Dermot O'Leary, chief economist at Goodbody Stockbrokers in Dublin said: "It is clear that the domestic economy has already entered recession, as evidenced by the fall in consumer and investment spending."
"Judging by the state of our main trading partners, it may be too big of an ask for them to take up the slack."
The European Commission has predicted that the slump in Ireland's economy may be followed by recessions in Germany and Spain.