Ireland Economic Forecast

Ireland Economic Outlook

May 31, 2022

After contracting in Q4, the economy is likely to have rebounded in Q1 in sequential terms. Most Covid-19 restrictions were scrapped in January, boosting spending and easing disruptions to labor supply. Retail sales growth plus the manufacturing and services PMIs averaged higher in Q1 than in Q4. That said, rising energy price pressures will have hurt consumer spending and the external balance; import growth averaged higher in Q1 relative to Q4, and consumer confidence was down sharply in March. Some support to growth will have come from the government’s EUR 505 million relief package in February and a fuel excise cut in March. Heading into Q2, activity is likely to weaken. Harmonized inflation reached record highs in April, while consumer confidence continued to slip in April–May. Additionally, supply bottlenecks and weakening foreign demand pushed the manufacturing PMI down in April.

Ireland Economic Growth

Growth is set to soften this year, partly due to a tougher base effect. Record-high inflation will restrain spending despite the removal of most Covid-19 restrictions. Supply bottlenecks, new Covid-19 variants, tense relations with the UK, and fuel price swings pose risks to the outlook. FocusEconomics panelists project GDP to expand 4.1% in 2022, which is down 0.1 percentage points from last month’s forecast, and 4.1% in 2023.

Ireland Economy Data

2015 2016 2017 2018 2019
Population (million)4.74.84.84.95.0
GDP per capita (EUR)55,75656,94561,56966,32070,145
GDP (EUR bn)263272297324347
Economic Growth (GDP, annual variation in %)25.23.78.18.25.6
Domestic Demand (annual variation in %)16.320.6-0.6-8.635.3
Consumption (annual variation in %)3.25.23.03.42.8
Investment (annual variation in %)52.650.8-6.8-21.194.1
Exports (G&S, annual variation in %)39.34.19.210.411.1
Imports (G&S, annual variation in %)33.218.41.1-2.935.6
Industrial Production (annual variation in %)44.32.1-2.5-4.82.9
Retail Sales (annual variation in %)10.87.63.93.72.1
Unemployment Rate9.98.46.75.85.0
Fiscal Balance (% of GDP)-2.0-0.7-0.30.10.4
Public Debt (% of GDP)76.773.867.763.558.8
Inflation Rate (HICP, annual variation in %, eop)0.2-0.20.50.81.1
Inflation Rate (HICP, annual variation in %)0.0-0.20.30.70.9
Inflation (PPI, annual variation in %)7.20.40.8-2.4-5.6
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)30.0-4.08.0-22.131.1
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)4.4-4.20.510.7-9.5
Current Account Balance (EUR bn)11.6-11.41.534.3-32.8
Trade Balance (EUR billion)42.644.739.948.862.5

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Ireland Facts

Value Change Date
Bond Yield-0.090.27 %Jan 01
Exchange Rate1.120.65 %Dec 31

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