DUBLIN (Reuters) – Ireland’s domestic economy shrank by 1.1% quarter-on-quarter from July to September, following the strong investment driven growth of 4.7% in the second quarter of the year, data from the Central Statistics Office showed on Friday.
Modified domestic demand (MDD), which strips out some of the ways Ireland’s large multinationals distorts economic activity, was still up 10.1% for the first nine months of 2022 and the CSO said the quarterly decline was mainly due to the strong second quarter base.
Ireland’s finance ministry’s current forecast is for growth of 7.7% for 2022 as a whole.
Most recent economic data have pointed to a softening of activity in the second half of the year and the finance ministry had expected rising inflation to tip consumer spending into negative territory in the third and fourth quarters.
Friday’s data showed that personal spending on goods and services managed to eke out quarterly growth of 0.3%, though that was well down on the 2.2% in the second quarter.
The finance ministry slashed its forecast for 2023 Modified domestic demand to 1.2% in September.
Gross domestic product (GDP), a broader measure of economic activity, grew by 2.3% on the quarter and was 10.9% higher year-on-year. The government has long cautioned against using this measure as it is routinely inflated by multinational activity.
“While economic activity increased for many sectors across the economy, the overall picture was mixed,” CSO Assistant Director General Jennifer Banim said in a statement, pointing to very strong agriculture quarterly growth and declines in the professional and financial services sectors.
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