By Andrew Bushe
DUBLIN — The Celtic Tiger has confounded its critics by roaring into the record books in the third quarter of last year with a growth rate of 11 percent in gross domestic product terms when many analysts thought the economy was slowing down.
The economy surged ahead in the third quarter, according to figures from the Central Statistics Office that show an acceleration from GDP growth rates of 8.8 percent in the first quarter and 8.1 percent in the second.
The phenomenal 11 percent growth is four times the EU average of 2.4 percent and outstrips the previous record of 10.7 percent, set in 1997.
The growth figure for the year is now expected to be about 10 percent and there is little sign of a slow-down this year.
A comparison of the figures for the quarter to September 1999 compared to the previous year shows investment in new buildings and capital equipment soared by 25 percent.
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Consumer spending increased by 9.1 percent, industry output was up 11 percent and transportation and communications grew 16.7 percent.
The only drop was agricultural output, down by 1.4 percent.
The trade surplus continued to grow with exports exceeding imports by £2.862 billion, as compared £2.133 billion in the third quarter of 1998.
The dramatic growth rate figures comes amid increasing concern about the economy over-heating and the strongest warning yet from the EU on the need for action to control inflation which is now running at 4.9 percent.
There is also increasing concern among trade unions that may seek a renegotiation of the Program for Prosperity and Fairness as increasing prices threaten to erode the 5.5 percent first phase of the pay deal.
EU Commissioner for Economic Affairs Pedro Solbes warned Finance Minister Charlie McCreevy to take measures to curb inflationary pressures in the economy.
Ireland’s inflation rate measured in euro-zone terms is now 5 percent — double the rate in the other euro zone countries where the trend is for consumer prices to dip.
Inflation in the euro zone fell in April to 1.9 percent, from 2.1 percent. In the 15 states of the EU, the figure also dropped to 1.7 percent in terms of the EU’s harmonized index.
However, Taoiseach Bertie Ahern said there was "no basis to any notion that we may be on an inflationary spiral.
"Informed and reasonable commentators acknowledge that inflation will moderate significantly later in the year," he said.