Ireland has officially entered recession.

The latest economic figures from the CSO show that the country’s GDP shrank by 6.1% between April and June – the largest quarterly fall on record.

Meanwhile the statistics office has revised down its growth estimate for the first quarter of the year to -2.1%.

A recession is defined as two quarters of negative growth in a row.

The 6.1% in the second quarter was significantly lower than the EU average, with a €37.98bn increase in exports offsetting the damage.

The CSO said COVID-19 restrictions decimated large parts of the economy – with construction contracting by 38.3% and Distribution, Transport, Hotels and Restaurants sector contracting by 30.3%.

Finance Minister Paschal Donohoe at the launch of the Stay and Spend scheme in Dublin, 03-09-2020. Image: Brian Lawless/PA Wire/PA Images

Speaking this afternoon, the Minister for Finance Paschal Donohoe said the CSO figures are “absolutely in line with what we would have expected.”

He said the virus was “doing the most damage” during the second quarter of the year and insisted officials have since detected a “very strong pickup.”

“I am very much aware that amid the statistics that are being published today, there are lives that have been affected, there are jobs that have been lost and there are businesses that have been closed,” he said.

“That is the kind of hurt that has happened in our society due to the effect of this disease.

A woman walks past a boarded-up shop on Dublin's Grafton Street, 04-06-2020. Image: Brian Lawless/PA Wire/PA Images

He said the economy was in a strong position before the outbreak and insisted State interventions would lead to improvements when the figures for the third quarter are released.

“What we are all working very hard to do now across all parties, across all the ministers is to redouble all our efforts now to help our economy recover and get people back to work,” he said.

Meanwhile, economist Jim Power said the impact of the outbreak is now becoming clear.

“If you look at the indigenous parts of the economy, consumer spending fell back by 19.6% which is pretty dramatic,” he said.

“We also saw the traditional indigenous Irish-owned businesses under quite a bit of pressure.

“The domestic economy in the second quarter hit very, very significantly by the shutdown imposed due to COVID-19.”

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