Business

Irish economy shrinks 1.6% as spending and exports fall

Man begging on streets
Image caption The Irish Republic has suffered one of the deepest recessions in Europe

The Republic of Ireland's battered economy shrank by 1.6% in the fourth quarter as consumer spending and exports fell.

The contraction compared with a 0.6% expansion in gross domestic product in the third quarter, according to the Central Statistics Office.

The fourth quarter figure meant that the economy, supported by a eurozone bail-out, shrank by 1% for the year.

Consumer spending fell 0.4% on the quarter and investment dropped 2.3%.

On the quarter, exports fell 1.4%, while imports slipped 0.1%.

The Irish property and banking collapse brought the country close to financial meltdown.

Dublin has so far been forced to take 34bn euros (£29.56bn; $48bn) from a European and IMF-funded bail-out package and impose austerity measures.

The results of stress tests on the Republic's banks are due on 31 March to determine how much more capital they need.

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