Ireland has held its first regular sale of government bonds since it needed an international bailout in 2010.
But the success of that auction was undermined by the release of data just afterwards which showed a big decline in its economy in the final three months of last year.
GDP fell 2.3 percent from the previous quarter and the slide mean Ireland’s economy contracted by 0.3 percent for the whole year.
There was big demand for Dublin’s bonds which were placed at a low rate of interest. It raised one billion euros from bonds maturing in 10 years time.
The country’s debt agency sold Thursday’s bond at 2.967 percent, the lowest level ever for 10-year paper. That compared with a 2011 peak above 15 percent.
But Phil Tyson, Head of Strategy for Interest Rate Products at ICAP, says Ireland and other eurozone countries that needed bailouts have to be aware they are still very much in the recovery phase.
“Clearly this is a timely reminder that while a positive environment continues for these peripheral countries at the moment, as far as the bond performance is concerned, they’ve got a long, hard road ahead,” Tyson said.
The surprise decline in Ireland’s economy in the final quarter came as imports surged and consumer spending fell.
Personal consumption was down by 0.6 percent. Exports rose 2.1 percent but imports climbed 5.8 percent.