YAHOO! NEWS (UK & IRELAND): The Republic of Ireland has become the first European Union economy to be pushed into recession by the credit crunch.
Irish gross domestic product (GDP) shrank by 0.5% in the second quarter compared with the previous three-month period, according to data from the Central Statistics Office.
That followed a contraction of 0.3% in the first three months of the year.
The technical definition of a recession is two or more successive quarters in which the economy shrinks.
Earlier this month, the European Commission predicted that the UK, Germany and Spain would also fall into recession before the year is out.
Dubbed the Celtic Tiger during massive growth in the late 1990s, the Irish business sector now faces its most difficult period since high unemployment and emigration hit the 1980s.
The Department of Finance pointed to the crumbling property market and the international credit crunch for the alarming figures.
A Government spokesman said: "As expected, lower levels of new house building had a major restraining influence on growth in the second quarter, as is evident from the very weak investment figures.
"Other factors at work include higher commodity prices, global financial market problems, weak demand in our major trading partners and adverse exchange rate movements." [Source: YAHOO! NEWS (UK & IRELAND)] Sky News | September 25, 2008
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