* Ireland's Q3 GDP falls 1.9 pct Q/Q vs -0.5 pct forecast
* Falls from euro zone's second-best performer to worst
apart from Greece
* Weaker global outlook seen damaging future growth
By Padraic Halpin
DUBLIN, Dec 16 Ireland's economy
contracted by 1.9 percent in the third quarter, far worse than
expected, as global economic turmoil dented export growth,
raising the stakes for its fiscal and debt targets under an
Ireland was the worst performing economy in the euro zone in
the third quarter apart from Greece, which no longer publishes
seasonally adjusted figures, marking a stunning reversal of
fortune from the second quarter, when it was the second-best in
class after Estonia, official data on Friday showed.
Ireland's quarterly GDP data are notoriously volatile due to
the inclusion of the earnings of Irish-based multinationals and
analysts said the country should achieve full-year GDP growth
this year, the first since 2007, but below the 1 percent
forecast by the government.
"It (GDP) is probably below the 1 percent this year," said
Austin Hughes, chief economist at KBC Bank. "In terms of next
year it just emphasises the difficulty we have."
The contraction in Gross Domestic Product (GDP) on a
seasonally adjusted basis was far worse than forecasts of a 0.5
percent fall by seven economists polled by Reuters.
Held up as a role model for other indebted euro zone
nations, deteriorating prospects for Irish growth threaten to
undermine its efforts to become the first country to emerge from
an EU-IMF bailout in 2013.
Ireland's international lenders have warned that growth
could deteriorate in the months ahead if Ireland's main trading
partners slide into recession.
Gross National Product (GNP), seen by some economists as a
more accurate indicator of the state of the economy because it
strips out the earnings of Irish-based multinationals, was down
2.2 percent in July-September, disappointing expectations for a
The data shows exports are struggling to compensate for a
domestic economy still stuck in the doldrums due to an
unprecedented housing crash and prolonged austerity measures,
including 3.8 billion euros ($5 billion) of fiscal adjustment in
its budget earlier this month.
Ireland's current account surplus came in at 850 million
euros compared to a surplus of 1.18 billion euros in the same
period last year.
Second quarter GDP growth was revised to 1.4 percent from
1.6 percent previously.
Ireland this month cut its GDP growth forecast for 2012 to
1.3 percent from 1.6 percent, the second downgrade in a month,
in line with 11 economists polled by Reuters at the start of the