MINISTER for Finance Michael Noonan was extremely cautious about Ireland's emergence from recession in the second quarter. However, a combination of strong jobs growth and rising retail sales could mean that we are about to endure the last of the hairshirt budgets. The Irish economy, as measured by GDP, grew by 0.4 per cent between April and June. While this might not seem like a lot, it came after three consecutive quarters during which GDP shrank and means that the Irish economy has technically emerged from recession.
Coming less than four weeks before Budget day, the second-quarter GDP figures were good news for the Government. However, Finance Minister Michael Noonan moved quickly to dampen any outbreak of euphoria, warning that he would still have to deliver a tough Budget on October 15.
"There is no reason to be throwing our hats in the air or anything like that," said Mr Noonan last Thursday.
Mr Noonan is right to be cautious. While GDP, which includes multinational profits, rose by 0.4 per cent in the second quarter, GNP fell by a similar amount over the same period. As GNP excludes multinational profits, most economists regard it as being a more accurate measurement of the performance of the domestic economy.
Last week's GNP figures from the CSO aren't the only indicator that the domestic economy is still bumping along the bottom. The value of non-motor retail sales fe...