Press release
Minister Donohoe welcomes Q1 GDP numbers but highlights challenges ahead for the economy
Published on
Last updated on
Published on
Last updated on
The CSO today (Friday) published the Quarterly National Accounts for the first quarter of 2020. Commenting on the figures, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T,D, said:
‘Today’s figures highlight the resilience and momentum that was present in the economy during the first quarter of the year, before the introduction of necessary Covid-19 restrictions. Despite a fall in consumption, GDP growth in the first quarter remained robust, supported by solid growth in exports and construction activity’.
“Not surprisingly, given the ramp-up of Covid-19 restrictions at the end of the first quarter, the domestic economy grew at subdued pace, with modified domestic demand up by a modest 0.6 per cent year on year. Consumption by households fell by 2.5 per cent year-on-year in the first quarter, in line with expectations. On the other hand, new housing output was up 17 per cent, further evidence of the improvement in housing supply as a result of the Rebuilding Ireland plan.
“Due to the temporary suspension of all ‘non-essential’ economic activity, output is expected to fall substantially in the second quarter. In fact, high frequency indicators suggest an unprecedented contraction in nearly all sectors during the quarter. However, incoming data including ultra-high-frequency data suggest that we are now past the low point and a gradual recovery is now setting in as restrictions are gradually being relaxed.
“The Government’s policy response to the Covid-19 crisis has been swift and forceful. The Government has acted to cushion, in as much as possible, the contraction in private sector demand and to support the retention of jobs. Measures to support the economy have looked to protect household incomes and to help firms to bridge-the-gap until restrictions are relaxed. This policy response is possible as a result of the careful management of the economy and the public finances in recent years, which means that we enter this period of uncertainty from a position of strength.”
ENDS