Ireland first in eurozone to fall into recession

25 September 2008 15:26  [Source: ICIS news]

LONDON (ICIS news)--Ireland is the first country in the eurozone to have fallen into a recession, according to figures released on Thursday by the country’s Central Statistics Office (CSO).

The country’s economy contracted by 0.5% in the second quarter, after shrinking 0.3% in the first quarter of this year.

The technical definition of a recession is when real gross domestic product (GDP) growth is negative for two or more consecutive quarters.

The CSO contributed the fall to weak consumer spending, significant declines in house building and a drop in industrial output from the construction sector.

Europe's largest economy Germany, which saw a fall of 0.5% in growth in the second quarter, may be in a technical recession, analysts said earlier this month, after data from the federal Economic Ministry showed the country's industrial production fell 1.8% in July.

The European Commission last week also predicted the UK economy would shrink by 0.2% in each of the third and fourth quarters this year, leaving it on course for a recession.

It said the Spanish economy also looked set to fall into recession.

A slowdown in consumer spending would go up through the supply chain and affect the chemicals industry.

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By: Hilde Ovrebekk
+44 20 8652 3214

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