Date Released: 28 June 2013
Reacting to the publication on Thursday, 27th June, by the Central Statistics Office (CSO) of the Quarterly National Accounts, indicating that the Irish economy is in recession, SIPTU economist, Marie Sherlock, said it is clear that the crisis is far from over.
She said: “These results are a stark reminder of the fragility of the Irish recovery as a sharp fall in domestic demand, investment and in exports combined to ensure Irish Gross Domestic Product (GDP) remains stagnant and the economy remains in recession. The 0.6% seasonally adjusted drop is the third successive quarterly fall in GDP since the Irish economy went back into negative territory last summer.”
The 3% drop in domestic consumption over the first three months of this year was the single largest quarterly fall since the start of 2009. It means that the seasonally adjusted spending by businesses and households in the Irish economy is at its lowest level since the crisis began in 2008.
“A fall off was already apparent in the retail sales results over the first three months with a very dramatic drop in department store spending over and above the usual post Christmas fall off. The bringing forward of the traditional post-Christmas sales to mid-December and the effect of the abolition of the PRSI allowance were certain to be factors in this drop in domestic demand,” Marie Sherlock said.
“A significant fall in UK import demand in the first quarter of 2013 together with the on-going impact of the euro zone recession has had a major negative impact on Irish exports. The 3.2% quarterly drop in exports is the largest drop seen since the crisis began and while a strong exporting performance was the key to lifting Ireland back into positive GDP territory in 2011 and 2012, this cannot be taken for granted in the years ahead.
“These latest figures add renewed pressure on the Government to minimise the deflationary impact of Budget 2014 and bring into sharp focus the real need to revive and support domestic economic activity through a major stimulus and investment programme,” Marie Sherlock added.