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Ireland Economy Shrinks By 1.9% In Third Quarter

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The Irish economy has begun to shrink again.

New figures from the Central Statistics Office (CSO) show a contraction in the 3rd quarter of the year of 1.9%.

When the profits of multinational firms are excluded the picture is worse again.

This shows a contraction in Gross National Product (GNP) terms of 2.2%.

Industry and agriculture grew but construction, public administration and other services are all in decline.

The first 9 months of the year show positive growth in the economy but if there is another quarter of contraction it may not reach the 1% growth the government had been expecting.

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Breaking news on sky news no link yet

Economy shrank in third quarter - CSO


Official figures show that the Irish economy, as measured by gross domestic product contracted by 1.9% in the third quarter of this year.

Under the gross national product measure - which does not include profits made by multi-nationals operating here - the economy shrank by 2.2%.

Both measures of the economy had shown growth in the second quarter of this year

Edited by Shotoflight
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According to the quote below it is Gross National Product that is more important for Ireland and that shrank by 2.2% in the third quarter.

Why are you distinguishing between GDP and GNP?

Regular readers will be aware that I have several criticisms of the use of GDP as a measure for economic growth and only yesterday I discussed some of them with reference to the UK. However a feature of Ireland’s economy is that she has a low corporation tax rate (12.5%) and by measures such as the tax-free financial business district in Dublin has encouraged overseas businesses to base themselves there. If you like the businesses are the corporate equivalent of what is called non-domiciled or non-dom for an individual.

So if they have come to Ireland for cheap and in some cases virtually no corporate taxes (Google) then if you try to tax them they will start to leave. It is this that GNP measures as it excludes the effect of such foreign businesses. To give you an idea of the scale real GDP in 2007 was 178 billion Euros and real GNP was 151 billion Euros so the difference is substantial and economic output is suddenly potentially some 15% lower.


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Probably about where we would be if we could exorcise the ghost of Gordon Brown from the inflation lies stats.

I get the feeling that Gordon Brown is going to become the next Thatcher, a hate figure who continues to be blamed for all the country's woes for decades after leaving office.

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I get the feeling that Gordon Brown is going to become the next Thatcher, a hate figure who continues to be blamed for all the country's woes for decades after leaving office.

I liked Thatcher, of course not perfect but I admired her spunk. (LOL)

I dislike Gordon Brown, but not as much as Tony Blair, clearly one of David Icke's reptiles from another planet IMO.

But in answer to your comment, Brown really cemmented his own legend with the totally awesome 'no more boom & bust' quote, and numerous claims from Nu Liebour of being the genuis behind the 'miracle' economy.

His real genius was in fact dumming down a gullible & greedy electorate who could see no further than the next years inevitable 10-20% rise in house prices.

Never in the field of human deception have so many lies been succesfully sold to so many by so few.

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From the Guardian....

"Megan Greene, head of European economics at Roubini Global Economics, said the data underlines Ireland's creaky position. She explained to my colleague Lisa O'Carroll believes Ireland will either need another baiilout to cover its funding costs or face a debt restructuring:

The government doesn't have any room to manoeuvre in terms of spending the bailout money if it wants to hit its bailout programme targets (which are based on overly optimistic GDP figures, so will be more difficult to hit than the government expects). All the bailout money is going towards financing the deficit and debt.

Noonan said yesterday that the plan is for Ireland to issue a lot of debt in the markets in 2012 (it has to issue a little in the markets next year but then a lot in 2013 according to the bailout programme, so significant issuance next year would reduce the huge funding hump in 2013). Irish bond yields have decoupled from the other bailout countries' and have come down, but still exceed 8%, which is completely unsustainable.

With unemployment soaring, domestic demand plummeting and Ireland's 3 biggest export markets - the UK, the US and the eurozone - either going into stall speed or recession, I don't think there's any chance Ireland can return to the markets for long-term debt next year.

Ireland will therefore either need another bailout in the same fashion as Greece next year to cover its funding costs, or it will face a bail-in (debt restructuring). Considering that Greece is likely to default and exit the eurozone towards the end of next year, Ireland may choose to default rather than accept the conditionality of another bailout. If other weaker eurozone countries aren't making their creditors whole, the Irish may wonder why they are going through such a painful structural adjustment to do so" .........

If Ireland defaults - what happens to RBS and our governments investment in it ????

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