Ireland Economic Forecast

Ireland Economic Outlook

June 30, 2020

Covid-19 and consequent containment measures have dealt a significant blow to the economy in Q2, after growth slowed in Q1 on a downturn in domestic demand. In April, manufacturing activity plunged; both the manufacturing and services PMI remained mired in contractionary territory in April–May amid depressed demand; and retail sales nosedived to a series low in April, reflecting the impact of lockdown measures on consumer spending. In better news, the lockdown has gradually been eased since mid-May, with restrictions being loosened more rapidly in June: Commercial centers reopened from 15 June, while bars, restaurants, hotels and other services to resumed activity on 29 June. Meanwhile, on 27 June, Micheál Martin of Fianna Fáil was elected as Ireland’s new prime minister. Martin will lead a historic three-way coalition alongside long-time rivals Fine Gael, as well as the Green Party. The presented policy agenda is largely focused on reactivating the economy and restoring employment.

Ireland Economic Growth

The economy is expected to shrink this year due to the Covid-19 shock. Social-distancing measures will cripple domestic demand and lift unemployment, while a feeble international trading environment will constrain the external sector. Fiscal and monetary stimulus should provide some support, however. FocusEconomics panelists project GDP to contract 7.1% in 2020, which is up 0.3 percentage points from last month’s forecast. For 2021, the panel sees GDP growth at 6.1%.

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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