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Roundup-Growth in domestic economy

Friday, March 22 08:14:30

Yesterday's 2012 GDP figures from the CSO matched exactly with the expectations of the Government, which had built 0.9 per cent growth into its economic plans. For most other economy-watchers, the outcome surprised on the upside, with the most striking positive coming in the performance of the domestic economy. It isn't powering along in Tiger fashion but the figures suggest it is stuttering slightly less than before, with an annual drop of 0.9 per cent in consumer spending, a better outcome than many had expected.

Furthermore, a 1 per cent quarterly expansion in consumer spending on a seasonally adjusted basis offers some hope for a more robust domestic economy this year. Alongside this, investment was up by 1.2 per cent for 2012 as a whole, again ahead of most forecasts and helping to balance against a 3.7 per cent drop in Government spending.

A sense that the State's slumbering (and cash-strapped) consumers and businesses could be ready to reawaken is particularly welcome in light of our export performance, which has been verging on the anaemic of late. Last year's export growth, while positive, was the lowest in three years. This reflected both weakness in exporters' main markets, notably the euro zone, and continuing declines in pharmaceutical sales. It remains to be seen how the export picture will develop over the year, particularly in light of uncertainty in Cyprus and its consequences for the wider European economy, but a sense that the domestic picture is brightening offers some encouragement amid the uncertainty. The Irish Times

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A British diplomat accused of leaking confidential Foreign and Commonwealth Office documents to Tullow Oil has been given a prestigious posting in New York. The High Court in London heard this week how Martin Shearman, then high commissioner to Uganda, took the side of Tullow during a tussle with its British counterpart Heritage Oil over who should pay a disputed $313 million dollar tax bill to the east African country.

Mr Shearman, whose wife, Miriam, was working for Tullow at the time, passed a letter from Henry Bellingham, the UK's minister for Africa, to Uganda's President Yoweri Musevini containing a plea to let the oil company avoid paying the bill. A scanned copy of the letter marked "restricted" was sent directly from Mr Shearman (48) to Andy Demetriou, Tullow's head of external relations. Graham Martin, Scots-born company secretary of the oil firm, admitted under cross-examination that Tullow "had received no formal security clearance" from the FCO. The Irish Times

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The National Treasury Management Agency has raised E500m in short-term money in an auction that was more than three times oversubscribed. The treasury bills, which have a maturity of three months, were sold at a yield of 0.24pc.

Total bids received amounted to E1.7bn - 3.4 times the amount on offer.

Earlier this month, Ireland celebrated a return to the bond markets after investors offered to lend a staggering E12bn to the Government for 10 years.

The NTMA, headed up by chief executive John Corrigan, has been issuing bonds with gradually lengthening maturities since July last year, when the first bonds since the bailout were placed with investors. The Irish Independent

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AIR passengers hoping for cheaper fares to the US have been dealt a blow after Ryanair signalled it will not be entering the transatlantic market. Less than a week after signing a E11.7bn deal with Boeing to deliver 175 new aircraft to its fleet, Ryanair has ruled out flights to North America.

The company's deputy chief executive, Michael Cawley, said Ryanair's business model was not suited to the long-haul market.

"I don't think it is ever envisaged that Ryanair would get into the long-haul market," he said.

"Long haul for us is flying to the Canaries or to Greece at the moment. Some of our flights are four and five hours. From Prestwick to the Canaries, it is five hours.

"As far as flying across the Atlantic is concerned, a lot of the things we do, like 25 minute turnarounds, are not that relevant in the context that you are not going to get an extra flight like you will from Shannon to London if you do it often enough during the day," Mr Cawley said. The Irish Independent