Ireland falls into recession

Thursday 25th September 2008, 11:30AM BST.

Ireland falls into recession Ireland is the first EU country to enter a recession as its economy contracted for the second consecutive quarter.

Over the last six months, Ireland’s economy declined by one per cent, after a sharp 1.3 per cent fall in the first quarter and a 0.8 per cent drop in the second quarter.

A recession is technically defined as two quarters of negative economic growth in a row.

Ireland’s Central Statistics Office said consumer spending was down 1.4 per cent over the quarter, while capital investment plunged by 18.8 per cent.

A significant decline in house building contributed to the decline in growth, with the construction sector shrinking by 12.2 per cent over the second quarter.

France, Germany and Italy have also experienced negative growth in the second quarter and will also enter recession if they see a second quarter of contraction.

Business confidence surveys in the countries have all hit their lowest levels in years, signalling this may be the case.

The UK’s economy ground to a halt in the second quarter and the EU Commission has predicted a recession by the end of the year, with negative growth in the third and fourth quarters.

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