ECONOMY: Economic growth eased sharply in the third quarter as the global slowdown took its toll, according to statistics released yesterday.

The quarterly national accounts showed that Gross Domestic Product grew by just 3.2 per cent in the third quarter, down from 9.4 per cent in the second quarter and 12.7 per cent in the first.

Although consumer spending held up well, growing by 4.8 per cent over year-ago levels, capital investment was 5.6 per cent below the same period in 2000.

Export and import performance also suffered with exports growing by just 5.3 per cent compared with 17.1 per cent in the first half of the year while imports were up 5.5 per cent against 11.7 per cent in the first six months.

If seasonally-adjusted GDP data were available, GDP could have fallen by 2 to 3 per cent between the second and third quarters, a CSO official said.

However, analysts cautioned against reading too much into the figures which tended to be "erratic", they said.

Mr Austin Hughes, economist with IIB Bank, said the data suggested the economy had weathered the global slowdown reasonably well.

He pointed to the GNP figures which showed that the GNP growth rate in the third quarter was 4.6 per cent compared with an average 6.5 per cent in the first half.

"That would suggest the Irish economy experienced a significant but controlled slowdown," he said.

Mr Jim Power, economist with Friends First, also derived consolation from the figures, saying the last two quarters of 2001 were likely to represent the low point of the current cycle.

"Quarter four growth, when it is released, is likely to show GDP growth slowing further to around 2.7 per cent, giving average annual growth of around 7 per cent for 2001 as a whole," he said.

Looking ahead, he pointed to the turn-around in the global economy, continued low interest rates and oil prices and a stabilising multinational sector as among the positives for the economy.

"Real GDP growth of 4 per cent should be easily achievable in 2002," he added.