Ireland: Economic and Political Overview
In this page: Economic Outline | Political Outline
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) | 551.55 | 560.57 | 587.23 | 613.96 | 639.22 |
| GDP (Constant Prices, Annual % Change) | -5.5 | -0.2 | 2.2 | 2.4 | 2.3 |
| GDP per Capita (USD) | 103,466 | 103,500 | 107,243 | 110,906 | 114,211 |
| General Government Balance (in % of GDP) | 2.0 | 1.6 | 0.9 | 0.8 | 0.4 |
| General Government Gross Debt (in % of GDP) | 43.3 | 42.4 | 40.7 | 39.0 | 37.8 |
| Inflation Rate (%) | 5.2 | 1.7 | 1.8 | 2.0 | 2.0 |
| Unemployment Rate (% of the Labour Force) | 4.3 | 4.4 | 4.4 | 4.5 | 4.5 |
| Current Account (billions USD) | 44.63 | 67.24 | 65.80 | 63.44 | 60.89 |
| Current Account (in % of GDP) | 8.1 | 12.0 | 11.2 | 10.3 | 9.5 |
Source: IMF – World Economic Outlook Database, Latest data available.
Note : (E) Estimated data
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 data available.
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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.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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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.).
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Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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