March 10, 2016 / 11:07 AM / 3 years ago

Irish economy grew by 7.8 percent in 2015, best in EU again

DUBLIN (Reuters) - Ireland’s economy grew by 7.8 percent last year, making it the fastest growing economy in the Europe Union for the second successive year after growth accelerated sharply in the final three months of the year.

A general view shows Government Buildings in Dublin, Ireland March 1, 2016. REUTERS/Clodagh Kilcoyne

Ireland has rebounded quickly from a 2010 international bailout and its economy benefited in 2015 from further falls in unemployment, a bumper year for retail sales and a weak euro that boosted the large export sector.

The economy expanded by 2.7 percent on a quarterly basis from October to December, up from 1.5 percent in the previous quarter, the Central Statistics Office said.

“Momentum actually strengthened in the final quarter. This is well ahead of all expectations. The consumer has been the most positive surprise feature of 2015,” Goodbody Stockbrokers chief economist Dermot O’Leary said.

“We’re not going to get the same growth in 2016, but there is a lot of momentum coming into this year and we will well exceed the rest of Europe again.”

Official forecasts for 2016 are for gross domestic product (GDP) growth of 4.3 percent.

The surge in activity in 2015 represented the fastest pace of growth in 15 years and meant Ireland’s economy grew faster than China’s and expanded at more than five times the euro zone average.

Gross national product, seen by some economists as a more accurate indicator of the state of the economy because it strips out the earnings of Ireland’s large cluster of multinational firms, rose by 5.7 percent.

While sterling’s recent depreciation against the euro may hit export growth this year - given Britain’s trade clout with Ireland - economic indicators in the first two months have been broadly positive.

Data on Thursday showed that although more than one in 10 homeowners remain behind in mortgage payments, the growing economy is helping more catch up. Inflation remains elusive, however, after prices fell annually again in February.

The GDP figures showed personal consumption rose by 3.5 percent last year, its best performance since the “Celtic Tiger” economy collapsed a decade ago, indicating that the domestic economy can pick up any slack from weaker growth abroad.

While GDP per head was more than 3 percent above the 2007 peak, growth is only gradually filtering down to many people and was one of the major factors behind voters rejecting the outgoing coalition at elections last month.

The election produced no clear outcome, making Ireland the latest euro zone state to face a prolonged political stalemate which senior ministers say could take weeks to break.

Editing by Jeremy Gaunt

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