IRELAND's economic recovery is a beacon for the rest of Europe and a lesson in how taking a sharp hit following the downturn is paying. off, the Financial Times said in an editorial today.

Last week surprisingly strong second quarter Gross Domestic Product figures, not seen since the early 2000s, prompted Finance Minister Michael Noonan to predict 4.5pc growth in the Irish economy for this year.

"As countries such as France and Italy stagnate, while bickering about long overdue reforms, they should take note of exactly how the Irish have done this," the Financial Times editorial said today, although it warned that there are still tough times ahead.

While acknowledging that growth here has been boosted by the strong performance of our main trading partners - the US and Britain - and low borrowing costs or yields by the actions of European Central Bank's Mario Draghi - it also said that that our growth is not "just the luck of the Irish."

It added that both the "long suffering" people and the Government have taken difficult choices including cuts to the bloated public sector.

It said that bad bank NAMA is proving its worth and is leading the way for more bank lending to start again.

However, the piece also warned that the growth figures should not used as an excuse to return to the heady days of the Celtic Tiger citing our dangerous public debt levels as an ongoing cause of concern, with private debt, including mortgages, even worse.

It added that with consumers, who are bogged down by debt and unemployment, unwilling to spend, until fairly recently, Ireland has been forced to rely on exports and Foreign Direct Investment (FDI) to grow.

"These are early days for Ireland's recovery," it said. "Yet it provides growing evidence of how countries that shape up after a crisis can recover strongly despite an unfavourable international outlook.

"Others should learn from its example," it added.

Online Editors