CSO indicates economy grew 4.5% in first half of 2007

The economy grew at 4.5 per cent in the first half of the year, figures released yesterday by the Central Statistics Office indicate.

The quarterly national accounts show that gross domestic product (GDP) in the first half of 2007 was €90.7 billion, more than €5.7 billion or 6.7 per cent more than the same period last year.

GDP includes profits booked here by foreign-owned businesses.

Gross national product (GNP), which does not include multinational profits and is seen as a more accurate reflection of the state of the Irish economy, hit €76 billion during the first half, 4.5 per cent more than the same period in 2006.

In the second quarter, GDP grew by 5.4 per cent year-on-year to €45 billion, and GNP swelled by 4.5 per cent to €38 billion.

Consumer spending topped €22 billion in the three months to the end of June - that was €1.8 billion or 6 per cent higher than the comparative period in 2006.

Spending totalled more than €44 billion in the first six months, €3.8 million more than in the first half last year.

The CSO said that, measured at constant prices, exports during the second quarter came to €36.9 billion, against imports of €30.1 billion.

The comparable figures for the same period last year showed exports of €34.5 against €29 billion in imports.

These offset weak performances by industry, which grew by just 0.7 per cent, and construction, which increased output by 2.4 per cent.

However, the Department of the Environment and Local Government said that 50,000 new homes were built in the first eight months of 2007.

The figure was in line with most predictions for the period, and supports forecasts that more than 70,000 new homes will be delivered by the year's end.

The strong growth in the first half of the year got a mixed reaction from economists.

Davy stockbrokers's Robbie Kelleher left his prediction of 4 per cent growth for the full year unchanged.

Dermot O'Brien of NCB Stockbrokers argued that the figures supported economic growth of more than 5 per cent this year.

Bloxham's Alan McQuaid predicted that GDP will expand by between 5.5 per cent and 6 per cent this year.

Dermot O'Leary of Goodbody Stockbrokers described the first-half performance as impressive.

"It is very much a case of looking in the rear-view mirror at this stage," he said. "The focus on Ireland now centres on the outlook for the housing market and how the obvious slowdown affects the other facets of the economy."

ESRI suggests drop in house prices will not harm spending: page 2;

Heading for a slowdown, not a recession: main section, page 18