Ireland's GDP jumps 1.6% in second quarter against eurozone's 0.2%, thanks to strong exports and car sales

There was a rare glimmer of hope of recovery for Ireland on Thursday after new figures showed economic growth exceeded expectations in the second quarter of the year, despite brutal austerity cuts and depressed consumer spending.

Figures released by the state's Central Statistics Office showed that gross domestic product – which includes output for the multinationals based in the Republic – jumped 1.6% in the second quarter of the year. This was far ahead of analysts' expectations of just 0.25% and outstripped growth in other eurozone countries and in the UK during the same quarter.

The figures mean Ireland is, tentatively, a shining light in Europe. Within the 17-member eurozone, only Estonia grew more rapidly in the second quarter. For the currency area as a whole, GDP expanded by just 0.2%.

Alan McQuaid, economist with Bloxham stockbrokers in Dublin, said the figures were "very encouraging". He had forecast growth of just 0.5% for the three months to June in a recent Reuters survey of analysts.

"I would assume that we will not be immune from what is going on globally, but after three years of contraction, this is very encouraging. The figures are very positive and support the view that Ireland is back. The government will be encouraged by these numbers," McQuaid said.

"Even if there is some contraction in the second half of the year and we did nothing, this is still good. If you look at France and Germany, they did nothing in the second quarter."

The CSO put the growth down to strong car sales – consumers had been incentivised to get rid of old cars as part of a government car scrappage scheme – and strong exports.

The CSO said gross domestic product in the three months to June was 1.6% higher than in the first quarter and 2.3% higher than in the same period of 2010.

The IMF recently downgraded its 2011 GDP growth figures from 0.6% to 0.4% and cut its forecasts for 2012 from 1.9% to 1.5%.