DUBLIN (Reuters) - Ireland’s economic growth rate surged to a post-crisis high of 4.8 percent last year, the fastest rate in the European Union, as data confirmed a stunning recovery from a devastating 2008 property crash.
After two years of near stagnation, higher exports and consumer spending lifted 2014 gross domestic product growth to almost four times the average 1.3 percent rate posted across the European Union after most countries had published data.
It is Ireland’s highest growth rate since 2007, the final year of the Celtic Tiger boom, when the economy grew by 4.9 percent.
The recovery is good news for Ireland’s government, which faces a general election early next year, though a recent surge in anti-austerity protests indicated that the recovery was slow to filter through to ordinary workers.
It also reinforces claims by the European Union and International Monetary Fund that austerity policies implemented by the Irish government were ultimately good for the country.
After exiting an international bailout at the end of 2013, the economy surged in the first six months of 2014. Growth in the second half was slower, with the economy expanding just 0.2 percent in the fourth quarter.
But there were positive signs, with personal consumption growing 1.3 percent quarter-on-quarter in the final three months of the year, while exports were up 1.2 percent.
“It shows the recovery is broadening and strengthening and there seems to be decent momentum coming into 2015 so you’d expect it to be sustained,” said Austin Hughes, chief economist at KBC Bank Ireland. “The pick up in domestic demand is the most encouraging aspect”.
Ireland’s 2015 budget is based on economic growth cutting the country’s budget deficit below the EU limit of 3 percent of GDP by the end of the year.
Finance Minister Michael Noonan said the data confirmed Ireland was the fastest growing economy in the European Union this year and that the data was consistent with projections for growth of 3.9 percent this year.
A series of anti-austerity protests late last year raised fears that ordinary workers were being bypassed by the recovery and might punish the government at elections next year.
“The government is happy in its ivory tower, but the man on the street is living in a different world,” said Billy Kelly, 57, a small business owner who said his working children were struggling to cover the rent and rising food and transport costs. “No one I know is saying ‘happy days’.”
Reporting by Padraic Halpin and Conor Humphries; Editing by Tom Heneghan and Toby Chopra