Irish growth rate prevents Eurozone from sliding into contraction

Activity by Irish multinationals boosted the eurozone economy in the third quarter, leading to a slight pick-up in growth.

Gross domestic product in Ireland – which includes the large multinational sector – grew 2.3 percent between July and September compared to the previous three months, according to figures from EU statistics agency Eurostat.

Ireland’s economy grew at nearly the same rate over the previous three months but is slowing from a peak of 7 percent in the first quarter.

Activity across the eurozone is also slowing, with GDP rising just 0.3 percent in the 19 countries using the single currency. GDP grew by 0.4 percent in the EU.

Eurozone growth was expected to turn negative in the third quarter as the war in Ukraine, skyrocketing energy and food prices and rising interest rates took their toll.

In the euro’s largest economies, including Germany, Italy and France, growth was slightly positive – but close to zero.

Cyprus, Malta, Romania and Luxembourg showed the highest growth rates after Ireland.

But Dutch growth turned negative. Nine of the economies of the 27 EU members shrank in the quarter.

The news comes a week before the European Central Bank’s next rate-setting meeting, which is expected to hike rates a fourth time.

Central Bank of Ireland Governor Gabriel Makhlouf said he expected an increase of at least 0.5 percent, which would bring the bank’s interest rate to 2.5 percent.

He warned the bank must hike rates further into “restrictive” territory – code for dampening demand and economic growth.

Ireland’s domestic economy is already shrinking, according to recent data from the Central Statistics Office.

Gross national product – a measure of economic activity that excludes profits from multinational companies – fell 2.2 percent between July and September.

Modified domestic demand, a broader measure of underlying domestic activity, fell 1.1 percent, the CSO said. Irish growth rate prevents Eurozone from sliding into contraction

Fry Electronics Team

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