The Irish economy returned to growth since 2007, but a slowdown in the final two quarters of the year meant the country was technically back in recession.
New data from the Central Statistics Office showed gross domestic product (GDP) grew by 0.7 per cent.
However, falling exports and reduced Government spending saw GDP decline 0.2 per cent from the third quarter.
Gross national product, which excludes multinational firms, fell by 2.5 per cent over the year, and 2.2 per cent compared with the previous quarter.
Exports edged lower in the three-month period, falling 1.1 per cent from the third quarter, Government spending was down by 3.4 per cent. Consumer spending rose 0.5 per cent in that period, while investment advanced 14 per cent.
"It is still very much a tale of two economies in Ireland, a trend that has been in place since 2008," said Goodbody chief economist Dermot O'Leary.
Minister for Finance Michael Noonan said last week that he expects to cut the Government's growth forecast for this year as exports slow and consumer spending continues to contract.
"The headline quarterly number will be a disappointment to consensus and the politicians, but it was not all bad as consumption expanded, as did the nominal size of the economy," NCB chief economist Brian Devine said.
Additional reporting: Bloomberg
