Good morning,


Through the lens of our top-down investment process we have spoken extensively in recent times on the relationship between inflation, interest rates, and economic growth. The general (and growing) consensus is that a US (and therefore global) recession will be avoided, and inflation will ultimately be brought under control. However, the timing of this, along with the market reaction, remains an unknown.


However, it was announced last week that Ireland is one country that has not avoided a recession. Firstly, a ‘technical recession’ is defined as two consecutive quarters of negative GDP growth. However, this is not universally accepted and became somewhat of a political issue in the US in recent years over the reluctance of the National Bureau of Economic Research (NBER) to declare one. Secondly, as we noted recently here, the Irish data can lead to some curious results. Ireland has seen five consecutive quarters of GDP decline, but very little market commentary in relation to the technical recession. In our view, this reflects a tacit acknowledgement from all involved that GDP continues to be a difficult statistic in the Irish context. A point worth keeping in mind for clients who may not have delved deeper that the initial recession headline.


As always, if you wish to discuss anything in further detail, please do get in touch.