Ireland and Belgium’s economies continued to grow from April to June – although Latvia’s was not so lucky.
Ireland’s gross domestic product (GDP), or national output, grew by 1.2% between April and June when compared with the previous quarter, according to preliminary data from Ireland’s Central Statistics Office, released on Monday.
Elsewhere in the eurozone, Belgium also released its growth figures on Monday – which came in at 0.2%.
Ireland’s figure shows the rate of expansion quickening (up from 0.7% in the first quarter), while Belgium’s economy is growing at a slower rate (down from 0.3%).
Growth in Ireland was driven by “an increase in the multinational dominated sector of Industry”, namely Ireland’s big international companies.
While the quarterly figure may seem like good news, there are caveats to the result.
When compared with the same quarter last year, GDP is estimated to have fallen by 1.4% in Ireland. To look at the first six months of the year, output also showed a 3.1% annual drop.
Added to this, GDP is not a particularly reliable gauge of Ireland’s economic health, given the country’s high proportion of US multinationals.
As the fate of a few companies can drastically swing the reading, experts will often refer to Modified Domestic Demand, which looks at certain investments and spending by Irish consumers and the government.
Also on Monday, Latvia announced that its GDP had contracted by 1.1% from April to June, a swing from the 0.8% expansion seen in the previous quarter.
The European Central Bank’s next meeting will be held in September, after policy makers kept interest rates unchanged earlier this month.
The decision to hold followed a rate cut in June, but the bank will be closely monitoring growth and falling inflation before making further moves.
“The question of September and what we do in September is wide open,” said ECB President Christine Lagarde earlier this month.
