Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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. The national economy has been supported by strong domestic demand and by the activities of multinational companies operating in the country. After recording an exceptional growth in 2021 (+13.6%), Ireland’s economy grew at a slower pace in 2022 (+9%) but remained very dynamic. Economic growth is supported by strong interior demand boosted by the full relaxation of the pandemic-related restrictions and dynamic exports from multinational-dominated sectors (IMF). The IMF expects GDP growth to ease to 4% in 2023 and 2024. The war in Ukraine, persistent inflationary pressures fuelled by supply bottlenecks and layoffs in the multinational tech sector will negatively affect growth (IMF and The Economist Intelligence Unit).

Despite the war in Ukraine and the global energy crisis, the Irish economy remained resilient in 2022. In addition to the strong financial performance of multinational companies, consumer and domestic firms’ spending were stimulated by the lifting of COVID-19 restrictions. The government implemented various measures to deal with the consequences of the war in Ukraine, including lower VAT on gas and electricity, discounted fuel prices, reduced public transport fares and allowances for less well-off households (Coface). The wide package adopted in September to support households and SMEs against inflation in 2022-2023 represented 2.6% GDP (OECD). As a result of the various fiscal packages, Ireland's previously balanced budget was pushed into deficit in 2020 (-5.1% GDP) and 2021 (-1.7% GDP), but it returned to a small surplus in 2022 (0.4% GDP) due to the surge in corporate tax revenues (IMF). According to IMF estimates, the budget should remain in surplus in 2023 (0.5% GDP) and 2024 (0.7% GDP). Taking into account the  to the transient nature of corporate tax revenues, the government decided to put EUR 6 billion of windfall tax gains in the National Reserve Fund by 2023 (OECD). Public debt, which is relatively modest compared to the Eurozone average, is expected to continue to decrease, from 47.0% GDP in 2022 to 42.8% GDP in 2023 and 39.2% GDP in 2024 (IMF). In addition to the pandemic-related supply chain delays, the war in Ukraine led to the surge in the prices of many commodities (oil, gas, metals, cereals) in 2022. From 2.4% in 2021, inflation soared to 8.4% in 2022 (IMF). It is expected to remain high in 2023 (6.5%) before declining to 3% in 2024 (IMF). The Budget 2023, coined as a ‘cost of living’ budget, aims at tackling inflation and supporting households and businesses. In addition to these short-term objectives, the priorities are also to ensure sustainable tax receipts, to reinforce the country’s resilience against future shocks, to address housing and health issues and to tackle climate change. Measures include tax credits, refunds, changes in tax rates and rate bands, extension of incentive schemes etc. (PwC) Global economic uncertainty over the war in Ukraine, high inflation, and the volatility of tax revenues that are highly dependent on the activity of multinationals are the main challenges. In the medium term, higher corporate tax rates and tensions around the implementation of the agreement between the European Union and the United Kingdom could deteriorate business climate (OECD).

According to data from the National Statistics Office (CSO), after soaring due to the effects of the COVID-19 pandemic, unemployment rate decreased to 4.3% in December 2022. IMF figures indicate an unemployment rate of 4.7% in 2022, and forecast a slight increase to 4.8% in 2023 and 2024. In November 2020, the COVID-19 Adjusted Measure of Unemployment (considering all claimants of the Pandemic Unemployment Payment (PUP) classified as unemployed) indicated a rate as high as 20.4% (CSO).

Foreign Trade

Ireland is a very open economy, and therefore very dependent on the international economic situation and vulnerable to external shocks. Trade accounted for 229% of GDP in 2021 (World Bank). Ireland’s main imports are aircrafts, biological materials, medicine, automatic data-processing machines, oil and petroleum products and automobiles. The country exports mainly biological materials, medicines, industrial raw materials, electronic parts and medical devices. In 2022, despite the war in Ukraine, the volume of exports of goods and services increased by 10.6% compared to 2020. Similarly, imports increased by 10% (IMF). The IMF forecasts a more moderate increase of exports in 2023 (+5.8%) and 2024 (+5%) and a similar trend for imports (+6.4% in 2023 and +5.4% in 2024).

Ireland's main trading partners are the European Union (the United Kingdom is the main market for imports and the forth largest for exports), the United States, China and Switzerland. The UK’s withdrawal from the EU (Brexit) raises many questions around the future relations between Ireland and its main trade partner. Irish exports are expected to slow down and to suffer from a depreciated sterling pound. The recently introduced higher corporate tax rates may also prompt multinational companies to delocalise.

The Irish trade balance is structurally in surplus. According to the WTO, in 2021 Ireland exported goods with a record total value of USD 190.3 billion, while it imported goods worth USD 119.5 billion. The country exported for 337.8 billion USD of services in 2021, and imported for a value of 341.5 billion USD. According to the Central Statistics Office data, trade balance in goods reached a surplus of EUR 64.8 billion during the 11 months from January to November 2022.

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in the Republic of Ireland, please visit the Irish government website COVID-19 (Coronavirus) with the official data, as well as the "Latest updates on COVID-19" section on the platform Gov.ie.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in the Republic of Ireland and the current sanitary measures in vigour, please consult the Irish government webpage Public health measures in place to prevent the spread of COVID-19  including the up-to-date information on the containment measures put in place and public health recommendations.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the dedicated page on the website of the Irish Tax and Customs Authority.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to the Republic of Ireland on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For information on the economic recovery scheme put in place by the Irish government to address the impact of the COVID-19 pandemic on the national economy, please visit the webpage Ireland's response to COVID-19 (Coronavirus) on the gov.ie website. Further details are available on the website of the Central Bank of Ireland.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Irish government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Ireland in the IMF’s Policy Tracker platform.

Support plan for businesses

For information on the local business support scheme established by the Irish government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the Department of Business, Enterprise and Innovation's website and the webpage of the Central Bank of Ireland. Further information is available on Enterprise Ireland’s Covid-19 Business Response website.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

To find out about the support plan for the Irish exporting companies put in place by the Irish government, please consult Enterprise Ireland’s Covid-19 Business Response website.