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UPDATE 1-Irish trade surplus jumps, seen supporting recovery

Published 03/26/2010, 09:58 AM
Updated 03/26/2010, 10:16 AM

* Preliminary Jan surplus 3.7 bln euros vs 2.5 bln in Dec

* Exports, services strength to hasten exit from recession

* Pharma, chemicals driving export growth

(Adds analyst comment)

By Andras Gergely

DUBLIN, March 26 (Reuters) - Ireland's trade surplus rose 47 percent in January from December after the biggest annual surplus on record in 2009, data showed on Friday, signalling a potential way out from deep recession.

Data on Thursday revealed Ireland's economy shrank far more than forecast in the fourth quarter of 2009 and revisions showed it did not exit Europe's longest-running recession last year as earlier data had indicated.

On Friday, the Central Statistics Office said Ireland's seasonally-adjusted trade surplus rose to 3.7 billion euros in January from 2.5 billion in December, according to preliminary figures.

Final data for the whole of 2009 showed Ireland had the biggest trade surplus on record at 38.7 billion euros.

"It is quite clear at this stage that Ireland's export sector will be the key player in the Irish recovery story over the next few years," said Alan McQuaid, chief economist at Bloxham Stockbrokers.

"As regards 2010, another record trade surplus is projected, of over 40 billion euros, which will help to limit the overall contraction in GDP this year," McQuaid said.

Last year, which saw the biggest drop in gross domestic product on record, a 3 percent fall in exports was dwarfed by a 22 percent drop in imports.

In two of the strongest sectors, medical and pharmaceutical exports rose 17 percent in 2009 and chemicals also rose slightly.

Exports of computers fell 28 percent, however, after Dell Inc , once Ireland's biggest exporter, moved much of its production to Poland.

Some economists said exports strength would be increasingly derived from services in the future, with e-commerce firm eBay Inc and networking portal LinkedIn among companies to have pledged this year to create new services jobs in Ireland.

"Indications from the merchandise exports release published by the CSO on Friday indicate that there is likely to be little growth in this segment in 2010," said Ronnie O'Toole, chief economist at National Irish Bank.

"2010 will probably mark the first full calendar year when services exports exceed that of merchandise goods," O'Toole said.

(Editing by Ron Askew)

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