IRELAND’S ECONOMIC OUTPUT fell significantly in the fourth quarter of 2010 – dragging its overall performance for the year into negative territory, and warning that the economic stagnation would continue.
The latest economic performance figures, published today by the Central Statistics Office, showed that Ireland’s economy – as measured in Gross Domestic Product (GDP), the total value of its output – shrank by 1.6 per cent in the months between October and December.
That fall is easily the largest of 2010, and undid the progress of a modest gain in the third quarter, when GDP grew by 0.6 per cent.
Encouragingly, however, Gross National Product (GNP) rose by 2 per cent in the quarter, its largest increase since the beginning of 2007.
GNP is seen by many as a better indication of the overall health of the native economy, as it measures only the output of enterprise owned in Ireland.
Similarly, the revised stats for Ireland’s economic growth in the third quarter show an improvement in both GDP and GNP from the original estimates published in December – with both figures pushed slightly upward.
The overall annual trend, however, is that the level of Ireland’s overall economic output for 2010 (in GDP) fell by 1 per cent, while the level of GNP fell by 2.1 per cent.
Although the shrinkage of the economy by both measurements is significantly less than had been registered in either 2008 or 2009 – with GNP falling by a staggering 10.7 per cent in 2009 alone – the poor performance of GDP in the fourth quarter will come as a major blow to the hopes of a more fundamental economic recovery.
The negative growth of GDP means that if the first quarter of 2011 is also negative, Ireland will have officially fallen into a ‘double-dip’ recession.
The statistics also come as a blow to Fianna Fáil’s economic credentials, with the Four Year Plan it announced in November – and which formed the basis of its election manifesto – assuming GDP growth of 0.25 per cent for the year, compared to the -1 per cent actually recorded.