Ireland Economic Forecast

Ireland Economic Outlook

September 28, 2021

GDP growth moderated in Q2, driven primarily by a surge in imports, with private consumption, public spending and fixed investment all rebounding in the quarter. That said, modified domestic demand—which better captures the country’s underlying economic performance—grew substantially more in Q2 than in Q1. The rosier domestic economy was largely thanks to a successful vaccination campaign and the loosening of restrictions. Turning to Q3, the recovery seems to have continued, with industrial output hitting an eight-month high in July, and the manufacturing and services PMIs both averaging higher in July–August than in Q2. Moreover, the unemployment rate fell and consumer confidence rose in July–August, likely supporting household spending. Moreover, on 31 August the government set out plans to scrap most remaining restrictions from 22 October onward, boding well for activity ahead.

Ireland Economic Growth

The recovery is set to be robust in 2021 and 2022, with the government’s plans to remove remaining restrictions acting as a potential catalyst. Healthy domestic and foreign demand will provide foundations for growth, although tensions with the UK and OECD minimum global corporate tax rate proposals could be a thorn in the recovery’s side. FocusEconomics panelists project GDP to expand 9.9% in 2021 and 4.9% in 2022, which is up 0.2 percentage points from last month’s forecast.

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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