Economic and Political Overview

flag Ireland Ireland: Economic and Political Overview

In this page: Economic Outline | Political Outline | COVID-19 Country Response


Economic Outline

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, Latest data available.

Note : (E) Estimated data


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 data available.


Find more information about your business sector on our service Market Reports.

Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024


Country Risk

See the country risk analysis provided by Coface.


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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

Type of State
Ireland is a sovereign, independent, democratic state with a parliamentary system of government.
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).

Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Political Freedom:
Civil Liberties:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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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.


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Latest Update: September 2023