Chart of the week: Ireland’s economic recovery gathers momentum

Irish GDP chart

Ireland has suffered a wrenching recession and only narrowly averted national bankruptcy thanks to a bailout from international creditors. But now it finally appears to be turning the corner.

GDP grew by 2.7% in the second quarter of 2014. The annual rate of expansion has now reached 5.1%, a figure typical of pre-crisis days. Meanwhile, unemployment has edged down to a five-year low of 11.6%. Ireland now looks set to trim its budget deficit to 4.8% of GDP this year, down from 7.2% in 2013.

Unfortunately, there isn’t much life in the domestic economy, as households are still weighed down by debts that total twice the national income, while mortgages arrears have been on the rise. Instead, growth depends on exports. For now, trade is strong.

Yet while Ireland’s two top trading partners, America and Britain, are growing rapidly, Europe, another key export destination, seems to be slowing. So it looks like there’s a long slog to go before the rebound reaches take-off speed.