Republic of Ireland economy continuing to shrink

The Republic of Ireland economy continues to shrink

The Republic of Ireland's economy shrank by almost 2% in the third quarter of 2011, compared with growth of 1.4% in the previous quarter.

The GDP figures were published by the country's Central Statistics Office (CSO).

The figures emphasised the continuing weakness of the domestic economy.

GNP, which represents the amount of output excluding multinational profits, is down 2.2% on the quarter and down 4.2% on the year.

That reflects the country's austerity policies which have hit consumer spending power and confidence.

The figures also show that the export facing parts of the Irish economy are doing well - agricultural output is up 15% on the year.

Net exports - exports minus imports - overall grew by 21.8% at constant 2009 prices, compared with the same quarter of last year.

Meanwhile, the construction industry is stuck in a depression with output down 20% on the year.

The figures were published as the International Monetary Fund (IMF) warned about the knock-on effect of weak economic growth outside Ireland.

After reviewing the government's budget and austerity measures to date the agency signed off on a 3.9bn euros (£3.2 billion) tranche of loans this week.

The IMF warned that weakening activity among Ireland's trading partners would slow Irish exports and leave real GDP growth at about 1% next year.