Irish Republic out of recession as GDP grows

The Irish economy saw modest growth in the third quarter of this year.
Figures just released by the government's statistics agency showed gross domestic product rose by 0.3% compared with the quarter before.

The figure indicates the country has pulled out of what was one of Europe's worst recessions.

The economy shrank by 7.4% compared with July to September last year, although that is better than the second quarter's year-on-year fall of 7.9%.

Harsh cuts

The government recently unveiled sharp cuts in spending to rebalance the country's finances.

The Irish Republic was once one of the fastest-growing in Europe, but it is now among the most heavily indebted in the 16-member eurozone, with a deficit amounting to 12% of GDP.

Its previously-booming property market left it highly vulnerable in the downturn. Its economic woes include a slump in house prices, high unemployment and an enormously expensive banking bail-out.

Caution

The country's budget contained a programme of 4bn euros (£3.6bn, $5.8bn) worth of severe cuts - to social welfare, investment, and even to the prime minister's own pay.

Analysts warned against reading too much into the figures. Eoin Fahy, chief economist at KBC Asset Management, said: "The process is still very volatile. Clearly we shouldn't overstate. It is a good news that GDP is growing rather than falling, but we still have to remain cautious because of the volatility."