The trade surplus narrowed by 23 per cent in December as exports fell and imports climbed by 8 per cent.

Figures from the Central Statistics Office showed exports declined to €7.5 billion, a 9 per cent fall compared with November, as a number of high value products came of patent.

Imports, meanwhile, rise 8 per cent to just over €4 billion, bringing the seasonally adjusted trade surplus to €3.484 billion for December.

With a poorly performing domestic economy, Ireland's economic recovery is dependent on exports. But analysts said the decline shouldn't be taken as evidence of a slowdown, with the value of exported goods higher in the fourth quarter compared to the previous three months.

"As is clear from the pattern of goods exports growth in 2011, we should not infer too much from one month's data – specifically the sharp fall in December," said Davy chief economist Conall Mac Coille.

"There is little tangible evidence that the contraction in euro area GDP in Q4 is pushing down on demand for Irish exports."

Over the 11 months between January and November 2011, exports rose by 5 per cent compared with the previous year, totalling €85.74 billion. That was fuelled by a 11 per cent rise in the exports of medical and pharmaceutical products, and an 8 per cent increase in the exports of organic chemicals.

This was partly offset by a decline in the exports of computer equipment of 11 per cent.

There was a rise in exports to the US of 6 per cent, or €1.1 billion, and a 4 per cent increase in goods exported to Britain. Together with Belgium, these countries accounted for the majority of Ireland’s exports.

Over the 11-month period, imports rose 6 per cent to €44.14 billion, with petroleum imports up 25 per cent, or €940 million, while medical and pharmaceutical products were 23 per cent higher.

Almost a third of Ireland’s imports came from Britain over the period.

Bloxham chief economist Alan McQuaid said the figures were "much as expected", with the Quarterly National Accounts indicating that growth in third quarter of the year was much weaker than the rest of the year.

"The export sector has been the main driver of Irish economic activity in recent times and will remain the key growth engine for some period to come. Despite the slowdown in the global economy, it is clear that Ireland has a very healthy and dynamic export model, and overall, it is in our view in a much better position than other Eurozone 'peripheral' debt countries to move forward once world growth picks up again," he wrote in a note.

"Amid the moderation in external demand, some loss of momentum in Irish merchandise export activity is expected in the coming months. Nevertheless, we believe that, as was the case during the 2009 collapse in global trade flows, the sectoral composition of external demand will shift in favour of goods which Ireland specialises in, especially the likes of pharmaceuticals."