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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).

Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 425.51504.52529.66594.10633.70
GDP (Constant Prices, Annual % Change) 6.213.612.05.64.0
GDP per Capita (USD) 85,234100,145103,176114,581121,010
General Government Balance (in % of GDP) -
General Government Gross Debt (in % of GDP) 58.455.445.239.936.1
Inflation Rate (%) -
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -29.1171.7946.6248.6747.47
Current Account (in % of GDP) -6.814.

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

Agriculture remains a key sector 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 beef and dairy categories are the largest and account for nearly 70% of Gross Agricultural Output (GAO). Other sectors to have a share in GAO include pig, sheep and cereals. Agriculture represents 1% of GDP and employs 4% of the labour force (World Bank, 2021).

Ireland's recent industrial development was achieved through a deliberate policy of promoting advanced export-oriented enterprises, and partly through attractive offers for investors. The sector accounts for 37.8% of GDP and employs 19% of the active population (World Bank). Textiles, chemicals and electronics perform particularly well.

The service sector accounts for 55.4% of GDP and employs more than three-quarters of the labour force (77%) (World Bank). Banking and finance have grown to such an extent that Dublin counts now as an important international financial centre, while tourism has become an important source of foreign exchange earnings. In 2021, tourism contributed to 1.2% of total GDP or EUR 5.1 billion, with 127,900 people employed according to the World Travel and Tourism Council (WTTC).

In 2022, despite the global crisis triggered by Russia’s invasion of Ukraine, Irish economic sectors remained resilient. The govenment put in place an energy support scheme to help businesses tackle inflation.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.4 18.8 76.8
Value Added (in % of GDP) 1.0 37.8 55.4
Value Added (Annual % Change) 0.4 20.3 7.0

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.



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.

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 93,198107,669101,10498,750119,496
Exports of Goods (million USD) 137,359164,794169,625179,772190,319
Imports of Services (million USD) 200,597241,804332,092295,688341,456
Exports of Services (million USD) 179,545222,127247,408262,309337,759

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

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 220.0217.1252.2247.8229.4
Trade Balance (million USD) 123,714129,048133,368162,352197,982
Trade Balance (Including Service) (million USD) 75,812110,47949,33482,115199,483
Imports of Goods and Services (Annual % Change) 1.22.542.3-2.1-8.3
Exports of Goods and Services (Annual % Change) 9.69.811.811.214.1
Imports of Goods and Services (in % of GDP) 99.094.3124.4114.495.0
Exports of Goods and Services (in % of GDP) 121.0122.8127.9133.3134.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change)

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)
United States 30.3%
Germany 12.1%
United Kingdom 10.6%
Belgium 8.4%
Netherlands 6.8%
See More Countries 31.7%
Main Suppliers
(% of Imports)
United Kingdom 20.9%
United States 15.7%
China 10.3%
France 8.5%
Germany 7.4%
See More Countries 37.1%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
President: Michael D. Higgins (since 29 October 2011, re-elected in October 2018)
Prime Minister: Leo Varadkar (since 16 December 2022)
Next Election Dates
Presidential elections: November 2025
Senate: 2025
House of Representatives: 2025
Current Political Context
General elections were held in February 2020, in which no party secured a majority but Fianna Fáil won the most seats. After months of coalition negotiations disrupted by the COVID-19 pandemic, traditional rival parties Fianna Fáil and Fine Gael formed a coalition government for the first time, along with the Green Party. The Fianna Fáil leader Micheál Martin was elected as Ireland’s Taoiseach (prime minister) in June 2020, succeeding to Fine Gael’s leader Leo Varadkar. The nationalist party Sinn Féin made a historic breakthrough at these elections, and in July 2022, it took advantage of the loss of the government's majority in the Dáil to launch a motion of censure. However, the motion of no confidence was largely rejected (Coface). This strategic weakness of the government, leaves the opposition well placed to condemn the coalition for its alleged failures on housing, health and mitigating the cost-of-living crisis (The Economist). In 2022, after two years of restrictions measures including mandatory lockdowns, hotel quarantine and masks-wearing, all COVID-19 restrictions were removed, but the government had to face the new challenge of high inflation triggered by the war in Ukraine. According to the rotating leadership agreement, Leo Varadkar returned to power in December 2022 for the second part of the mandate.

After three years of conflict, the British Parliament voted in December 2019 in favor of the plan to leave the EU proposed by Prime Minister Boris Johnson. In December 2020 on Christmas Eve, a 'thin deal' was signed, leaving much topics unsettled, to avoid a catastrophic exit without a deal. The stakes were crucial for Ireland because of its privileged trade relations with the United Kingdom and its land border with Northern Ireland. Besides the Brexit issue, Ireland adopted an international tax reform increasing the corporate tax rate, as agreed with the OECD. In December 2022, the Finance Minister announced that Ireland's corporation tax rate would be increased to 15% for large companies in 2024.

Main Political Parties
Historically, the Fianna Fail and Fine Gael parties have dominated politics.
- Fine Gael: centre-right, socially moderate and fiscally conservative
- Fianna Fail: centre/centre-right, populist
- Labour: centre-left
- Sinn Fein: left-wing
- Green Party: centre-left, driven by green politics.

-Renua Ireland
-Social Democrats
-Socialist Party

- Aontú

-Workers and unemployed Action: left

-Independents 4 Change: left

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) and Senate (Seanad). The Chamber of Deputies has 166 members elected by universal suffrage and the Senate is composed of 60 members (one part elected by the national universities and the other part by a representative panel of the civil society).


COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic), please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, 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.