THE IRISH economy put in its strongest performance since the recession in the April-June period, according to new figures published yesterday.

The figures were, however, overshadowed by yet another day of deepening concerns about the state of the world economy, Europe’s response to its debt crisis and a deteriorating political situation in Greece. Global stock markets fell sharply with European shares falling to their lowest level for more than two years, wiping some €200 billion off the value of the top 300 European shares.

The widest measure of Irish economic activity – gross domestic product (GDP) – expanded by 1.6 per cent between the first and second quarters of 2011. A narrower measure of growth which excludes foreign companies’ profits, gross national product (GNP), also expanded – by 1.1 per cent quarter-on-quarter. Domestic demand, which excludes exports and imports, grew too, up by 0.8 per cent.

It is the first time since the recession began that GDP, GNP and domestic demand have grown simultaneously.

However, these figures are volatile and can be subject to significant revision. They do not take account of the deepening of the euro area financial crisis since July or the continued signs of weakening in economic activity globally.

The slowdown in the world economy in the second quarter of the year was reflected in Irish export figures, which grew by 1 per cent quarter on quarter – the second lowest rate of expansion since exports began recovering at the beginning of 2010.

The release of the Irish figures came on the eve of a meeting of global leaders in Washington. International pressure on Europe to intensify efforts to contain its worsening debt crisis is expected to increase further at the meeting.

In Greece yesterday, transport workers took strike action after the Greek government produced a drastic new austerity plan in a bid to secure an €8 billion bailout loan.

In a stark illustration of the issues at stake for the country, finance minister Evangelos Venizelos told the Greek parliament that he would prefer Greeks to suffer wage and pension cuts than to ensure a complete economic collapse.

In Brussels, however, a senior official acknowledged the new cuts and tax measures were pushing the Greek people to the limits of their endurance. Horst Reichenbach, who leads the EU Commission taskforce charged with reforming the Greek tax system, said the country’s population “is at the brink of not accepting any further pain”.

The global financial and economic situation is set to dominate the annual meeting in Washington of the International Monetary Fund today and tomorrow.