Government stands by growth outlook
Published 20/09/2012 | 12:42
The Government will not revise its outlook for growth, despite new figures revealing a stagnant economy.
The Department of Finance insisted latest findings - that the value of all goods and services measured by gross domestic product (GDP) remained flat - were in line with forecasts.
"There is nothing in the figures that would suggest that growth forecast of 0.7% will not be achieved," said a spokesman.
Jobs Minister Richard Bruton claimed exports have played a part in good growth for homegrown firms and that the overall growth was evidence Ireland was performing well in a difficult environment.
According to the figures from the Central Statistics Office (CSO), Irish business - measured by gross national product (GNP) - enjoyed a surge of 4.3% from April to the end of June.
The CSO put improvements on the domestic front down to increased net exports growth, as well as the industrial sector - mainly in manufacturing and building. However, data analysts at Davy stockbrokers warned that the Government should consider growth in this area with caution.
"(It is) mainly due to declining factor outflows as multinationals repatriated profits to Ireland," said the firm. "As this could easily unwind in quarter three, we cannot infer any upturn in the domestic economy."
Meanwhile, the flat GDP figures have been met with alarm bells. Irish Congress of Trade Unions chief economist Paul Sweeney said the Government needed an urgent focus on growth.
"Domestic demand is crucial in employment creation and retention and is also an indicator of Irish consumers' welfare," said Mr Sweeney. "The budget adjustment must be scaled back and accompanied by a far greater investment programme for jobs."
Consumer spending fell by 0.4% in the quarter, investment spending by 29.4% and Government consumption by 3.9%, the figures found. While industry grew, all other sectors - such as transport, software and communications - contracted. The only exception was agriculture, which saw a very slight rise of 0.5%.