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The Guardian: Ireland facing a double dip recession

One economist is so shocked by the fall in our output, he thinks it’s a misprint.

IRELAND’S RECOVERY FROM the deepest recession of any eurozone country came to a quick and unexpected end today when the Irish government announced that national output dropped by 1.2% in the second quarter of 2010.

After posting an increase in growth in the first three months of the year, official data showed that the former “Celtic Tiger” sank into a double dip recession in the spring.

News of the relapse rattled the financial markets and put additional pressure on Dublin’s unpopular coalition government, which had previously insisted that its tough budget cuts were helping to stabilise the economy. Ireland has also been hailed by Britain’s coalition government for its decision to tackle the double-digit budget deficit left by the collapse of its property bubble with immediate and deep cuts.

Investors warned that fears about Ireland’s ability to generate growth would push up the interest rates on its debt.

Jeremy Cook, chief economist at currency dealer World First, said: “When I saw the figure I honestly thought it was a misprint; it’s just horrible. ”

Larry Elliott is economics editor of the Guardian.

Read the full article at The Guardian.

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