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Economic and political overview

Economic Overview

Since the end of the EU-IMF bailout in late 2013, Ireland has enjoyed steady economic growth and positioned itself as the fastest-growing European economy, supported by strong domestic demand and the activities of multinational companies operating in the country. After a decline of 5.5% in 2023, Ireland’s real GDP further contracted in the first half of 2024, mainly due to ongoing volatility in the multinational-dominated sectors. Headline investment sharply declined in the first half of 2024, largely due to intellectual property exports in the second quarter. However, Irish exports rebounded, driven by a return to growth in pharmaceutical trade and continued strength in service exports, even excluding intellectual property-related activities. Overall, GDP declined by an estimated 0.5% in 2024, with growth projected at 4% in 2025 and 3.6% in 2026, according to the EU Commission (whereas the IMF figures are +2.2%, and +2.4%, respectively). Domestic demand is expected to expand by 2.8% in 2025 and 3% in 2026.

Ireland’s general government budget registered a surplus of 4.4% of GDP in 2024, with a significant portion (2.7 percentage points) driven by a one-off revenue boost from the EU Court of Justice’s ruling on 10 September 2024 regarding tax rulings for two Apple group companies. In 2025, the surplus is forecast to decrease to 1.4% of GDP, as revenue growth is expected to slow without the one-off revenue seen in 2024. While expenditure growth is projected to moderate from 2024, it will remain robust in 2025. The national budget for 2025 assumes strong increases in public sector pay, investment, and social transfers to support living standards and public services. In 2026, the budget surplus is expected to decline to 1.3% of GDP, as revenue is forecast to normalise while higher expenditure levels are anticipated to become more entrenched (EU Commission). Ireland's general government debt-to-GDP ratio is projected to decline from 41.6% in 2024 to 38.3% in 2025 and further to 36.8% in 2026. However, the reduction will be slower than a direct translation of budget surpluses into debt reduction, partly due to transfers to the newly established Future Ireland Fund and the Infrastructure, Climate and Nature Fund, as well as accrual adjustments. Inflation in Ireland eased significantly in 2024, reaching 0.0% in September, primarily due to lower energy and non-energy industrial goods inflation. Headline inflation was projected at 1.4% for 2024, 1.9% for 2025, and 1.8% for 2026 by the EU Commission. However, underlying price pressures persist, with wage growth expected to keep core inflation elevated. Consequently, HICP inflation excluding energy and food is forecast to remain above the headline rate.

Employment remained strong in early 2024, driven by high net inward migration and increased female workforce participation. The unemployment rate remained steady at 4.4% and is projected to stay at similar levels, given the tight labour market. Employment growth is expected to continue into 2025 and 2026, albeit at a slower pace, in line with the ongoing expansion of the domestic economy. Overall, Irish citizens enjoy one of the highest GDP per capita (PPP) in the world, estimated at USD 131,548 in 2024 by the IMF. However, inequalities are still evident: according to the CSO’s “Survey on Income and Living Conditions 2023”, the poorest 20% of the population received 9.6% of the nation's nominal equivalised disposable income, while the richest 20% accounted for 37%.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 551.55560.57587.23613.96639.22
GDP (Constant Prices, Annual % Change) -5.5-0.22.22.42.3
GDP per Capita (USD) 103,466103,500107,243110,906114,211
General Government Balance (in % of GDP) 2.01.60.90.80.4
General Government Gross Debt (in % of GDP) 43.342.440.739.037.8
Inflation Rate (%) 5.21.71.82.02.0
Unemployment Rate (% of the Labour Force) 4.34.44.44.54.5
Current Account (billions USD) 44.6367.2465.8063.4460.89
Current Account (in % of GDP) 8.112.011.210.39.5

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Agriculture represents 0.9% of GDP and employs 4% of the Irish labour force (World Bank, latest data available). The primary sector remains a key pillar as the government seeks to strengthen its role in the economy by modernising it and transforming the food processing industries (beef, dairy, potatoes, barley, wheat). The sector manages 4.5 million hectares of agricultural land and 0.73 million hectares of forestry. Over 80% of agricultural land is used for pasture, hay, and grass silage, 11% for rough grazing, and 8% for crops, fruit, and horticulture (data FAO). The Irish agri-food sector is globally orientated, with approximately 90% of Irish beef, sheepmeat and dairy produce exported each year. According to the CSO, the value of Agricultural Output at Basic Prices is projected to rise by 4% (+EUR 430 million) to EUR 11.7 billion in 2024. Milk volumes are expected to drop by 4%, but with prices rising by 7%, the value of milk production will increase by EUR 85 million to EUR 3.6 billion. Livestock values are forecasted to grow nearly 4% (+EUR 164 million) to EUR 4.7 billion, driven by increases in the value of cattle (+2%), pigs (+9%), and sheep (+16%). Finally, the value of Crops is expected to rise by 5% (+EUR 137 million) to EUR 2.6 billion.

The Irish industrial sector - which accounts for one-third of GDP and employs 18% of the active population - is a diverse landscape comprising traditional and emerging industries. Historically, Ireland's industrial sector has been dominated by pharmaceuticals, biotechnology, and medical devices, with multinational corporations such as Pfizer, Johnson & Johnson, and Boston Scientific having significant operations in the country. In recent years, emerging sectors such as renewable energy, information and communications technology (ICT), and financial services have gained momentum, fueled by government initiatives and a skilled workforce. The country's commitment to research and development, coupled with favourable tax policies, has attracted investment in areas like clean technology, cybersecurity, and fintech. Data by CSO show that turnover in manufacturing industries was up by 17.9% when compared with the previous three-month period.

The service sector accounts for 60.9% of GDP and employs more than three-quarters of the labour force (78% - World Bank). Key sectors include financial services, where Dublin serves as a prominent European financial hub, hosting numerous international banks, insurance companies, and fintech startups. Ireland's tourism industry is also vital: the Irish Tourism Industry Confederation (ITIC) estimates that international visitors spent EUR 6.2 billion (excluding fares) in Ireland in 2024, marking a 13% increase from the previous year, with North America being the largest source market. Moreover, the country has a thriving technology and digital services sector, bolstered by the presence of major tech companies like Google, Facebook, and Microsoft, which have established significant operations in Ireland. Emerging sectors in the Irish tertiary landscape include cybersecurity, data analytics, and e-commerce. Concerning the banking sector, as of the end of 2023, Ireland had 48 banks operating, including 17 credit institutions authorised in Ireland (two of which were covered bond banks) and 31 branches of banks authorised in other European Economic Area countries (data European Banking Federation).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.0 18.4 77.6
Value Added (in % of GDP) 0.9 33.2 60.9
Value Added (Annual % Change) 14.8 -21.1 8.2

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Ireland is a very open economy, and therefore very dependent on the international economic situation and vulnerable to external shocks. Trade accounts for around 237% of GD (the sixth-highest level globally - World Bank, latest data available). According to data by the Central Statistics Office (CSO), in 2023, exports of chemicals & related products totalled over EUR 126 billion, making up nearly two-thirds of total exports. Machinery & transport equipment accounted for 13%, and food & live animals exports reached EUR 14.4 billion, or 7%. Imports were dominated by machinery & transport equipment, which made up 38% of total imports, valued at over EUR 53 billion, including aircraft. Chemicals & related products imports were valued at EUR 40 billion (28%), while food & live animals accounted for 7% of imports.

In 2023, the U.S. was Ireland’s largest export market, receiving EUR 54 billion in exports, which accounted for 28% of the total. The UK followed as the second biggest export partner with EUR 22.4 billion (11%), followed by Germany with EUR 20.4 billion (10%). Belgium and the Netherlands (9% each) rounded out the top five export markets. In 2023, the UK was Ireland’s largest source of imports, with over EUR 26 billion in imports (19% of the total). The U.S. followed with EUR 23 billion in imports (16%), followed by France (13%), China (8%), and Germany (6%) completed the top five import partners (data CSO).

The Irish trade balance is structurally in surplus. According to the WTO, in 2023. Ireland exported goods with a total value of USD 209.5 billion (-2.1% y-o-y), while imports were stable at USD 147 billion. The country also exported USD 397.6 billion worth of services (+2.1%) against USD 389.3 billion in imports (+9.2%). The country’s trade balance was estimated to be positive by 39.9% of GDP in 2023 (World Bank). According to the Central Statistics Office, in the first 11 months of 2024, Ireland's goods exports grew by 14% to exceed EUR 207 billion compared to the same period in 2023, whereas imports fell by EUR 6.8 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 101,10499,823120,301147,269147,065
Exports of Goods (million USD) 169,625180,104190,658214,156209,499
Imports of Services (million USD) 375,826374,204346,704356,480389,313
Exports of Services (million USD) 257,650293,717353,899357,027397,592

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 249.7250.1224.4232.1237.2
Trade Balance (million USD) 131,292162,616199,248215,362168,643
Trade Balance (Including Service) (million USD) 20,22492,441222,321226,351181,476
Imports of Goods and Services (Annual % Change) 40.60.0-8.716.01.2
Exports of Goods and Services (Annual % Change) 10.513.814.113.5-5.8
Imports of Goods and Services (in % of GDP) 122.5114.691.495.4102.2
Exports of Goods and Services (in % of GDP) 127.3135.5133.1136.7135.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 10.03.03.23.23.2
Volume of imports of goods and services (Annual % change) 7.03.53.83.83.8

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Ireland is a member of the following international economic organisations: IMF, European Union, ICC, European Economic Area, WTO, Organization of American States (OAS) (observer), OECD, among others. For the full list of economic and other international organisations in which participates Ireland click here. International organisation membership of Ireland is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Ireland can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
United States 27.6%
United Kingdom 11.4%
Germany 10.4%
Belgium 9.4%
Netherlands 8.5%
See More Countries 32.7%
Main Suppliers
(% of Imports)		 2023
United Kingdom 18.8%
United States 16.5%
France 12.3%
China 7.7%
Germany 6.5%
See More Countries 38.3%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Michael D. Higgins (since 29 October 2011, re-elected in October 2018)
Prime Minister: Michael Martin (since 23 January 2025)
Next Election Dates
Presidential elections: November 2025
Senate: March 2025
House of Representatives: November 2029
Current Political Context
After President Michael D. Higgins dissolved the 33rd Dáil on November 8 at Taoiseach Simon Harris' request, the general election for the 34th Dáil was conducted on November 29, 2024. With 48 seats, Fianna Fáil became the largest party, while Fine Gael, its ruling partner, only managed 38 seats. The two parties came within two seats of a majority with their combined 86 seats. Due to severe losses, the Green Party only managed to hold onto one seat, which was occupied by Roderic O'Gorman, its leader. Sinn Féin remained the second-largest party with 39 seats, while both the Social Democrats and Labour saw gains, each winning 11 seats, an increase of five. After weeks of talks, the long-dominant centre-right parties Fianna Fáil and Fine Gael agreed to form a coalition with the support of several independent lawmakers. On 23 January 2025, Micheál Martin was elected taoiseach and he will now hold that office until 2027 when Fine Gael leader and Tánaiste (deputy prime minister) Simon Harris is due to take over.
Main Political Parties
The main parties currently represented in the parliament include:

- Fianna Fail: centre/centre-right, populist
- Sinn Fein: left-wing, democratic socialist and Irish republican party advocating for a united Ireland. It is the main opposition party
- Fine Gael: centre-right, socially moderate and fiscally conservative. Allied with Fianna Fail
- Labour: centre-left social-democratic party founded in 1912, advocating for workers' rights and social justice
- Social Democrats: centre-left party advocating for social justice and progressive social policies
- People Before Profit–Solidarity (PBPS): a left-wing electoral alliances formed by members of two socialist political parties, People Before Profit (PBP) and Solidarity
- Aontú (Unity): conservative nationalist party promoting traditional values and advocating for Irish unity
- Green Party: centre-left, driven by green politics
- Independent Ireland: promoting non-affiliated, grassroots-driven governance and policies in Ireland.
Executive Power
The President, who serves as the Head of State in a largely ceremonial role, is elected for a 7-year term and can be re-elected only once. The Prime Minister (Taoiseach) is the Head of the Government. He is appointed by the president after being appointed by the lower house.
Legislative Power
Bicameral national Parliament (Oireachtas): House of Representatives (Dail Éireann) and Senate (Seanad). The Chamber of Deputies has 174 members elected by universal suffrage and the Senate is composed of 60 members (of which 49 indirectly elected and 11 appointed).
 

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