Ireland Economic Forecast

Ireland Economic Outlook

May 3, 2022

After falling in Q4, GDP is likely to have rebounded in Q1 in quarter-on-quarter terms. Most Covid-19 restrictions were removed in January. This will have boosted spending and eased disruptions to labor supply, with retail sales growth plus the manufacturing and services PMIs averaging higher in the quarter than in Q4. Nonetheless, rising energy price pressures—catalyzed by the war in Ukraine—will hit spending and the external balance, with import growth averaging higher in January–February compared to Q4 and consumer confidence down sharply in March. Some support to activity will have come from the government’s February EUR 505 million relief package and March fuel excise cut. Heading into Q2, activity is likely to weaken despite a VAT cut effective from May; inflation is set to increase and consumer confidence was sharply down again in April, boding poorly for spending.

Ireland Economic Growth

Growth is set to cool this year, partly due to a tougher base effect. Elevated inflation will restrain spending despite most Covid-19 restrictions being removed in January. 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 4.2% in 2022, which is down 0.7 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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