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Ireland's economic growth slows to 3.5 per cent, still on course for EU-leading gain in 2014

DUBLIN – Ireland’s economic growth is slowing but the country remains on course to record the European Union’s biggest gains in 2014, official figures showed Thursday.

The Central Statistics Office said Ireland’s annual growth in gross domestic product slowed to 3.5 per cent in the third quarter. Though much lower than the 7.3 per cent surge reported for the second quarter, this is still the best in the 28-nation EU.

Finance Minister Michael Noonan said the latest figures reinforced government expectations of 4.7 per cent growth this year.

“Most importantly this growth is translating into jobs,” said Noonan, noting Ireland’s current 10.7 per cent unemployment rate versus a 2012 peak of 15.1 per cent.

Ireland has rebounded strongly following its exit from a 2010-2013 bailout by European partners and the International Monetary Fund.

The 2015 budget introduces the first income tax cuts and welfare rises since 2008, when the global credit crunch ravaged Ireland’s property-fueled economy and triggered six years of austerity.

The Irish Business and Employers Confederation, which represents 7,000 employers in this country of 4.6 million, expressed disappointment in the third-quarter figures and warned against complacency.

“We must renew our focus on competitiveness in order to continue this strong economic performance,” said the group’s chief economist, Fergal O’Brien. He said the continued risk of deflation and recession in the 18-nation eurozone left Ireland vulnerable.

Separately, statisticians reported that average prices fell 0.3 per cent in Ireland last month, reflecting uneven demand for many goods and services as consumers struggle with high personal debt and austerity-hit incomes. Sharp income tax rises since 2008 have pruned at least 15 per cent from the net incomes of middle-class households.