It's Official - Ireland Is In Recession

After months of finding other ways to describe the country's monetary situation, such as 'financial downturn', 'economic troubles', and 'market difficulties', the Irish Republic's government now faces recession.

Ireland's economy now officially fulfils the criteria for a recession - defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales," by the National Bureau of Economic Research.

The Central Statistics Office reported on Thursday that gross domestic product (GDP) had contracted by 0.5% in the three months to the end of June, fitting the bill for a true recession.

It is the first time Ireland has experienced a recession since 1983, and although it is early days, few forsee a quick recovery.

There is growing speculation that the US economy is headed in the same direction with such a situation across the Atlantic likely to spell further economic difficulties for the Irish government.

Representing 21% of the world's economy, a US economic contraction can have a devastating effect on all European economies.

So far this year, a number of European countries have fallen into the financial depression including, Denmark, Estonia, Latvia and Sweden, with the UK and Spain expected to be declaring a recession by the end of the year, with France and Italy expecting 0% growth over the same period.

(DW)