Recession got worse in first three months of year
The recession severely worsened in the first three months of the year, new figures revealed today.
According to the Central Statistics Office, the economy shrank by 8.5% over the last year and has now contracted for 15 months in a row.
The country’s quarterly accounts also detailed sharp drops in consumer spending, capital investment, construction work and industrial output.
The last time the Irish economy suffered such dramatic falls was the late 1950s.
In the Budget, Finance Minister Brian Lenihan forecast the economy would shrink by 7.75% for the whole of 2009 – a figure already passed by collapsing trade.
“There is no getting away from the fact that today’s data from the CSO are very poor figures,” a spokesman for the minister said.
However, the Department of Finance went on to claim the alarming report is in line with expectations and suggested the pace of decline has slowed in the last three months.
“We must be very careful not to double-count: today’s figures relate to the first quarter and previously published data had indicated a very poor performance in this period,” the spokesman said.
“In other words, we already knew that conditions had deteriorated significantly in the first quarter.
“Moreover, there are some indications that the rate of deterioration may have slowed in the second quarter of this year.”
The department claimed sharp falls in house building and in personal spending were the main reasons the recession-hit economy has continued to worsen.
However, officials also noted strong exports even in the face of a global downturn.
“We are looking at a substantial decline in living standards,” the minister’s spokesman warned.
“But it must be remembered that part of economic activity since the mid-part of this decade involved over-production of housing, and as such was unsustainable.
“Moreover, living standards are declining in virtually all of our trading partners – we are in a truly global recession.”
