Irish Republic out of recession

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The Irish economy saw modest growth in the third quarter of this year.

Figures just released by the government's statistics agency showed gross domestic product rose by 0.3% compared with the quarter before.

The figure indicates the country has pulled out of what was one of Europe's worst recessions.

The economy shrank by 7.4% compared with July to September last year, although that is better than the second quarter's year-on-year fall of 7.9%.

Harsh cuts

The government recently unveiled sharp cuts in spending to rebalance the country's finances.

The Irish Republic was once one of the fastest-growing in Europe, but it is now among the most heavily indebted in the 16-member eurozone, with a deficit amounting to 12% of GDP.

Its previously-booming property market left it highly vulnerable in the downturn. Its economic woes include a slump in house prices, high unemployment and an enormously expensive banking bail-out.

Caution

The country's budget contained a programme of 4bn euros (£3.6bn, $5.8bn) worth of severe cuts - to social welfare, investment, and even to the prime minister's own pay.

Analysts warned against reading too much into the figures. Eoin Fahy, chief economist at KBC Asset Management, said: "The process is still very volatile. Clearly we shouldn't overstate. It is a good news that GDP is growing rather than falling, but we still have to remain cautious because of the volatility."