Ireland exits recession

Bailed-out eurozone nation Ireland exited recession in the second quarter with economic growth of 0.4 percent thanks to solid expansion of its construction and export sectors, official data showed Thursday. Ireland fell into recession in late 2012 but returned to growth in the three months to June of this year, the Central Statistics Office (CSO) said in a statement. Ireland's economy had contracted during the previous three quarters, the CSO confirmed. A recession refers to two or more consecutive quarters of negative growth. "Preliminary estimates for the second quarter of 2013 indicate that GDP increased by 0.4 percent in volume terms on a seasonally adjusted basis compared with the first quarter of 2013," the CSO said. However the growth rate was weaker compared with market expectations. The Irish economy shrank by 0.6 percent in the first quarter. "Preliminary estimates for the second quarter of 2013 show that GDP rose by 0.4 percent seasonally-adjusted quarter-on-quarter, a much weaker performance than expected," said Alan McQuaid, economist at Merrion Stockbrokers. "That said, the positive increase means that Ireland has technically come out of recession." A breakdown of the latest data showed that Ireland's construction sector grew by 4.2 percent in the second quarter compared with the first three months of the year. "The real estate market has bottomed out, although it is way too early to call this a recovery," said ING bank economist Anthony Baert. "Finally, with the improving economic climate in Ireland's most important trading partners, the eurozone, the US and the UK, prospects look good for Irish exports. Therefore, we forecast a gradual strengthening of Irish economic activity in the following quarters," he added. Ireland's economy meanwhile contracted by 1.2 percent in the second quarter compared with the equivalent period in 2012. Ireland was rescued with an 85-billion-euro ($115-billion) bailout from the International Monetary Fund and the European Union in late 2010. Its economy had been through a period of turmoil in the run-up to the 2008 global financial crisis and after, amid soaring government debt, a property market meltdown, banking crisis and surging unemployment. Thursday's data precede what is set to be another painful austerity budget due in a few weeks, with many commentators suggesting a return to growth may offset extra spending cuts or tax hikes. The nation's economy has benefited also in recent times from solid exports. Its trade surplus widened by 8.0 percent in July from June as exports grew faster than imports, recent official data showed. Ireland had been known as the 'Celtic Tiger' economy for its double-digit growth spanning a decade from the mid-1990s.