Irish economy grows 1.3 pct, best since late 2007

June 23, 2011 - 11:44 AM

DUBLIN, Ireland (AP) — Ireland's economy grew by 1.3 percent in the first quarter as exports helped the bailed-out country post its best quarterly performance since the end of 2007, the Central Statistics Office reported Thursday.

Though exports were buoyant, the statistics office showed consumer demand remaining weak.

That's hardly surprising given the spending cuts and tax increases being enacted in the country to get the public finances back on track in return for last year's euro67.5 billion bailout from the eurozone and the International Monetary Fund.

The first-quarter growth didn't quite make up for a 1.4 percent fall in the previous quarter.

Since 2007, Ireland has had GDP growth in only three out of 13 quarters and seen unemployment rise to 14 percent as the banking sector collapsed and the booming property market went into reverse.

"There's no real signs of growth in the economy overall in the short term because of the drag of domestic demand," Dermot O'Leary, economist at Goodbody Stockbrokers in Dublin, said.

Caveats aside, Sonia Pangusion at IHS Global Insight said any good news from Ireland was welcome.

"We believe that Ireland is much better placed than Greece and Portugal to generate growth, given that strong economic fundamentals are still in place," Pangusion said.

Greece and Portugal have also been bailed out and Greece looks like it's going to need a second financial rescue if it's going to avoid a default on its debts.