The global downturn took its toll on the Irish economy in 2002, national accounts published today show.
But the figures give a distorted picture of the underlying situation due to factors unique to the Irish economy.
Gross National Product (GNP) which measures the wealth created by Irish citizens and Irish-owned companies, grew by only 0.6 per cent in 2002 - the lowest growth rate since 1986.
But economists point out this figure exaggerates the weakness of the domestic economy because of the sharp fall in profits of a few Irish-registered companies operating overseas, most notably Elan.
Conversely, Gross Domestic Product (GDP) - which measures all wealth created within the State - is inflated by the repatriated profits of a few multinationals such as Pfizer. The GDP figure for 2002 was 6.3 per cent, leading to the largest gap between the measures yet seen.
"Depending on how you look at it, the economy either collapsed or accelerated," said Mr Austin Hughes, chief economist at Irish Intercontinental Bank.
"Neither data are consistent with monthly data or anecdotal evidence, the reality is that the slowdown took hold without any shadow of a doubt dominated by a poor economic climate," he added.
But even accounting for such anomolies there is no doubt the Irish economy weakened considerably in 2002 and this trend looks set to continue into early 2003.
Consumption weakened throughout the year - reflecting growing concern about the economic prospects. Consumers were also concerned about the weakening labour market which was somewhat disguised by a rise in public sector recruitment in the run-up to last year's general election.
The fall in exports and imports of -1.8 per cent and 8.4 per cent respectively in 2003 is also in line with slowdown seen in the rest of the world.