Irish recovery on course despite 2013 slowdown

Eurozone member Ireland, which exited an international bailout programme in December, saw its economy shrink by 0.3 percent in 2013 after a particularly weak fourth quarter, official data showed Thursday. Annual gross domestic product (GDP) dropped after a 2.3-percent contraction to output in the final quarter of last year compared with the previous three-month period, the Central Statistics Office said in a statement. But the government and analysts said Ireland was on course to recover this year with unemployment on the way down. In a sign of growing market confidence over the country's economic health, Ireland on Thursday successfully placed its first issue of long-term debt since 2010. The treasury said it had raised 1.0 billion euros ($1.4 billion) from issuing 10-year government bonds at 2.967 percent in an oversubscribed auction. Ireland's economy in the fourth quarter of 2013 was meanwhile hit hard by a 10.5-percent decline to net exports, largely owing to higher imports. But gross National Product (GNP), which strips out the affects of multinationals operating in Ireland, expanded by 3.4 percent last year -- indicating that the domestic economy performed well. "2013 (GDP) output mostly declined due to net exports. Most notably, the pharmaceutical sector has suffered from the expiration of a number of patents, which hit exports hard," said analyst Anthony Baert at ING financial group. "Falling unemployment, rising retail sales and improving confidence point towards a further strengthening of the economy." Also commenting on the data, Finance Minister Michael Noonan contrasted the GDP contraction with an "encouraging" labour market. "Employment data is a reliable indicator of underlying developments in the economy. The fall in unemployment by three percentage points over the last two years is welcome and inroads are being made into the unacceptably high level of unemployment." Ireland's unemployment rate sank to a near five-year low of 11.9 percent in February, official data revealed last week. - Ireland on recovery path - In December 2013, Ireland became the first of the rescued eurozone countries to exit its bailout programme following a period of state spending cuts and tax rises, but its economy remains fragile despite falling unemployment. Dublin had turned to the International Monetary Fund and European Union in November 2010 for an 85-billion-euro ($118.6-billion) lifeline following a banking crash and one of history's worst housing bubbles. After painful belt-tightening, Ireland is now returning unaided to the international lending markets -- while eurozone strugglers Greece, Portugal and Cyprus remain locked into the bailout process. Dublin has forecast GDP growth of 2.0 percent for 2014. Philip O'Sullivan, chief economist with Investec in Dublin, said Thursday's "figures skew an underlying narrative which is that the recovery in the Irish economy is intact as evidenced by other data releases". He told AFP: "Not withstanding today's disappointing headline figures, we believe the momentum behind the domestic economy and the pick up in our main domestic partners will see much stronger results in 2014 and beyond."