Ireland's economy contracted by 2.3% in 2008 after a steep drop in the fourth quarter as recession tightened its grip on the eurozone member nation, official data showed on March 26.
Irish gross domestic product (GDP) shrank by 7.5% in the three months to December compared with the fourth quarter of 2007, the Central Statistics Office also said.
"For the year as a whole, GDP fell 2.3% in volume terms while GNP fell 3.1%," the CSO said.
Gross national product (GNP) is regarded by the Irish government as a more accurate barometer of the country's economic performance as it strips out substantial profits earned by multi-national companies in Ireland which are taken out of the country.
In September, Ireland became the first eurozone country to fall into an official recession after it declared two successive quarters of negative economic growth -- meeting the technical definition of a recession.
Prior to the current downturn, the former "Celtic Tiger" Irish economy had not experienced a recession since 1983. Ireland's economy had been termed the Celtic Tiger thanks to a prolonged period of double-digit growth in the 1990s.
Ireland is also suffering deflation, with prices falling 1.7% on a 12-month basis after a drop of 0.1% in January. A prolonged period of falling consumer prices is known as deflation, a danger in a contracting economy such as Ireland's because it encourages people to defer purchases in the hope of getting them cheaper later on. As they wait, demand falls, taking prices down further and so setting off a vicious cycle adding to the pressure on the economy.
Copyright Agence France-Presse, 2009