The Irish government readies for the 2015 budget, indicators point out that the Irish economy is recovering. However without a surge in the growth it will be difficult to reduce the debt burden. Irish economy was one of the quickest growing economies during the three months to June. It continued its painful recovery process after a property-market and banking collapse in 2008 which forced the government to seek financing from the IMF and the European Union until late last year.
The report from the Central Statistics Office has some reassuring figures. GDP grew by 7.7% from July 2013 to June 2014. It has been the biggest annual rate of growth since early 2007 crisis. Quarterly GDP rose 1.5 percent versus the January-March quarter.
In comparison, the Euro zone as a whole, economic output was flat in the second quarter. Latvia recorded the second quickest expansion in the EU, a 1% rise from the three months to March.
The country’s economic growth has been lethargic in recent years and below the expectations of government and international lenders. Weak growth in the rest of the European Union nations had reduced the demand for Ireland’s exports. However things are looking far better now.
Finance Minister Michael Noonan is optimistic that his country will escape from debt woes that forced it to take a 2010-2013 international bailout. Noonan had earlier forecast growth of just 2.1 percent. However latest figures shows that Ireland could record around 4.5 percent GDP growth this year.
The figures also give Ireland some respite and allow it to resume borrowing normally. Its credit ratings are rising slowly. The quicker its economy grows the easier it will be for Ireland to refinance its debts on bond markets. A better GDP than forecasts means Ireland can achieve its deficit targets. It also meant that there will be better tax collections and lower costs on welfare payments as the employment market recovers.