Pearse Doherty
Question:238. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that the economy is back in recession; and if he will make a statement on the matter. [16281/13]
View answerTuesday, 16 April 2013
Questions (238)
Written answers
The most recent data show that GDP contacted by -0.4 per cent quarter-on-quarter in the third quarter and by -0.0 per cent in the fourth quarter. In relation to the fourth quarter figure, the decline was very modest, and does not show up at the first decimal point. Importantly, the same statistical release shows that domestic demand stabilised in the second half of 2012, with growth in consumer spending for the first time since 2010. The data-flow in recent months have also been positive on the domestic front as core retail sales have now been in positive territory in year-on-year terms in each of the last seven months. In addition, labour market data show increases in employment in the second half of last year.
My Department forecast GDP growth of 1.5 per cent for 2013 at Budget time. The main downside risks to this forecast remain beyond our control and relate to the external environment as well as some sector specific issues. Since then, a second successive year of negative growth has been forecast in the euro area given the simultaneous deleveraging and consolidation under way in so many euro area countries. A more prolonged downturn in our key international markets would negatively impact upon our export performance. Such a prolonged downturn could arise from a more protracted period of deleveraging or from any re-ignition of the sovereign debt crisis in the euro area.
My Department will publish revised forecasts at the end of April, taking into account all available information.