Dáil Éireann Debate, Wednesday - 23 May 2012
64 Deputy Dessie Ellis asked the Minister for Finance if the reductions in GDP growth in quarter 3 and quarter 4 of 2011 officially places this State back in recession; and if he will make a statement on the matter. [25642/12]
Amharc ar fhreagraPreliminary estimates from the Central Statistics Office (CSO) show that, for 2011 as a whole, GDP grew by 0.7 per cent. This was the first full year of growth since 2007 and is a very welcome development.
The economy is expected to record a second successive year of positive growth this year. My Department's latest forecasts — which were published in April's Stability Programme Update — project GDP growth of 0.7 per cent again this year. The recovery is expected to broaden out and gain ground next year, with growth of 2.2 per cent foreseen. This view is shared by other forecasters, both domestic and international. Indeed, the figures published yesterday by the OECD show
GDP growth of 0.6 per cent this year and 2.1 per cent next year, broadly in line with those presented in the SPU. There are, of course, risks to the economic outlook. A number of downside and upside risks were identified in the SPU and remain valid at this juncture. Given the current heightened uncertainty, my Department is closely monitoring the economic situation and the
risks to its growth forecasts, and will continue to do so over the coming weeks and months. The technical definition of a recession is two consecutive quarters of negative growth. According to the preliminary estimates from the CSO, GDP contracted on a quarterly basis in the third and fourth quarters of last year. While disappointing, this was not unexpected given the heightened uncertainty and weak external environment in the second half of last year. In this context, it should be borne in mind that a number of other countries saw a contraction in activity in the third and fourth quarters of 2011. It is generally believed that the economy grew again in the first quarter of 2012.
