Irish economy expands further, set to be fastest in EU

Ireland's economy expanded further in the second quarter of 2015, keeping the eurozone country on track to be the fastest growing in the EU for a second year, official data showed yesterday. Irish gross domestic product (GDP) - the total value of all goods and services produced in the economy - grew 1.9 percent in the three months to the end of June, the Central Statistics Office (CSO) said in a statement. It was a slight slowdown however compared with the first quarter. GDP had grown 2.1 percent in the three months to the end of March, up from the previous forecast of 1.4 percent, the CSO added.

Ireland's economy accelerated 5.2 percent last year, making Ireland the fastest growing economy in the European Union, a feat forecast to be repeated this year.

In 2013 Ireland became the first of the financially rescued eurozone countries to exit a bailout program following a period of state spending cuts and tax rises.

"Ireland's impressive recovery continued in Q2. And with the conditions in place for sustained rapid growth, it is set to remain the eurozone's fastest growing economy," said Jack Allen, European economist at research firm Capital Economics.

Finance Minister Michael Noonan said Dublin's objective now was to build on the gains made in recent years and "secure the recovery."

He added: "The increase in economic activity is broadly based unlike in the past when activity was excessively concentrated in the construction sector. We are now seeing both domestic-facing and exporting sectors performing strongly."

Noonan also said exports were strong in the second quarter, growing 13.6 percent.

Amid positive Irish economic data and better-

than-expected tax receipts this year, Dublin is under increasing pressure to loosen its purse strings in next month's budget, the final one before the next general election.

The coalition government made up of the larger center-right Fine Gael party and the center-left Labour party is committed to tax breaks and spending increases worth up to 1.5 billion euros ($1.67 billion).

"We must act with a steady hand to carefully measure what we do and there's going to be no daft spending spree just because it's an election year," Noonan told reporters at Government Buildings.

"The extra resources, which will come through from the growing economy, will be used to reduce the debt and to reduce the deficit."

Prior to y

esterday's data Dublin forecast growth of 4 percent for 2015, although this will be revised as analysts say that even if growth is flat in the second half of the year annual growth is now forecast at 5.7 percent. The European Commission has forecast growth for the EU at 1.8 percent and 1.5 percent in the eurozone overall.