Ireland Economy

Ireland Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax system

Basic data

The onset of the global financial crisis in 2008, which affected all of Ireland’s major trading partners (especially the US and Great Britain), exacerbated the problems and brought negative consequences for Irish exports and the economy as a whole. Ireland’s economic policy has been set in a crisis management format since 2010. Therefore, in the budgets of 2011-2014, there were significant cuts in the public sector, the tax burden was increased, these steps were expected to increase the state budget’s income by several billions. Budget 2017 was the second ‘spend positive’ budget in this respect and 2017 itself was an extremely successful year for Ireland. Economic growth continued with a positive trend. According to Statistics Ireland, GDP growth in 2018 was 6.8%. Covid-19 had a profound effect on the Irish economy and a recession ensued. Anti-epidemic measures led to the highest unemployment in the history of the Republic of Ireland, and at one time more than 1 million people were on government support. According to general measurement, economic activity and private consumption decreased by 15.5% in real terms. However, in the 3rd quarter of 2020, the economy started to grow again (11.1%), which was caused by the easing of epidemiological restrictions. Ireland thus became one of the fastest growing economies in the world in 2020 and was the only economy in the EU to experience growth that year. According to the estimates of the European Commission (Winter 201 Economic Forecast), the Irish economy should grow at a rate of 3.4% in 2021 and 3.5% in 2022. Ireland is a highly developed knowledge-based economy and focuses on services, high technology, biotechnology, financial services, agriculture and the food industry. Ireland is an open economy. Check ebizdir for economical facts of Ireland.

Table from MOP + additionally balance of payments, indebtedness/GDP.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 5.9 2.5 13.4 1.3 5.1
GDP/population (USD/PPP) 90,317.50 94,055.40 110,280.00 115,540.00 123,690.0
Inflation (%) 1 -0.3 2.4 5 2.4
Unemployment (%) 5 5.9 6.3 5.1 4.9
Export of goods (billion USD) 170.8 183.5 195.4 214.9 235.8
Import of goods (billion USD) 101.7 97.6 121.1 171 197.7
Trade Balance (Billion USD) 133.4 165.5 195.2 174.2 180.4
Industrial production (% change) 2.8 5.1 18.7 -3.8 6.9
Population (millions) 4.9 4.9 5 5 5.1
Competitiveness VII.63 XII.63 13/64 ON ON
OECD export risk ON ON ON ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -3.4
Public debt (% of GDP) 55.8
Current account balance (billion USD) 72
Taxes 2022
AFTER 20% (40%)
F.O 20% (40%)
VAT 23% (reduced rates: 13.5% and 9%)

The government’s 2021 budget was presented to the Irish Parliament in October 2021 and subsequently passed. The budget was still affected by the pandemic crisis (EUR 7 billion was set aside for managing COVID-19). Expenditures that are not directly related to the management of the Covid-19 epidemic have increased by more than EUR 5 billion in 2022. The carbon tax was increased by €7.5 per ton (from €3to €41).

In 2020 and 2021, the balance of the state budget was around 3.4% of GDP. However, this figure is given the dominant role of the multinational sector in the calculation of GDP and the Irish debt per capita is one of the highest in OECD countries. The government’s 2022 budget reflects the current Irish government’s efforts at fiscal consolidation, which aims to reduce the overall deficit to €3 billion (0.6% of GDP) by 2025. However, the progress of this fiscal consolidation is slowed by government spending on support programs for households aiming to face increased energy costs. In 2022, the state budget deficit should therefore be reduced to 2.7% of GDP.

Banking system

The Central Bank and Financial Services Authority (a joint authority that supervises the functioning of the financial system in Ireland) currently registers 36 banks in Ireland, i.e. incl. branches of foreign banks. The main banks in the country, which account for more than 1/3 of the assets of the credit institution sector, are the following: Allied Arish Banks (AIB), Bank of Ireland, Danske Bank and Ulster Bank (the so-called Big Four). In April 2009, the government established the semi-state consolidation agency National Asset Management Agency (NAMA), whose task is to siphon off bad so-called toxic loans from banks at a reduced value. Even in 2013, the recovery of large Irish banks continued, whose main problem remains non-performing mortgages. The main event in this regard was undoubtedly the liquidation of the state-owned Irish Bank Resolution Corporation (IBRC), which was created as a consolidation institution after the collapse of the Anglo Irish Bank and the Irish Nation nwide Building Society. All IBRC assets were transferred under NAMA. Since 2015, the situation has also stabilized in the banking sector in view of the improving economic results of the country. This is now significantly regulated – there have been, for example, fundamental restrictions on credit policy in the form of capping maximum loans, permanent political pressure is exerted on banks to restructure non-repayable mortgages, etc. At the end of 2017, the government decided to support mortgages for applicants who intend to buy their first property with a fund of EUR 200 million. In terms of insurance companies, members of the Irish Insurance Federation ( collectively control 95% of the Irish insurance market. An important place in the financial sector is occupied by the International Financial Services Centre, established in Dublin in 1987 to support the inflow of foreign capital into the country. Branches of dozens of foreign financial companies operate in the center under favorable tax conditions.

Tax system

(if possible use Deloitte tax guides and highlights, available on the website )

1 paragraph Clear/unclear, stable/unstable tax system.

The collection of taxes and fees in Ireland is the responsibility of the Office of the Revenue Commissioners ( The Irish tax system has always been based on its flexibility and favorable rates for both individuals and businesses. The unexpected onset of the credit and financial crisis, accompanied by ever-larger and larger national budget deficits, forced the Irish government to raise taxes. Most important to Ireland’s economic success in recent years has been the low corporate income tax, the basic rate of which is 12.5% ​​(for income from the main activity, for other income the rate is 25%), which has been maintained despite criticism from a number of European countries after providing financial assistance to the Irish economy. Ireland is currently fighting to maintain, or also attracting more foreign investment and low corporate tax is the showcase of the Irish government for foreign investors.

2 paragraph Taxation of FO (total and who bears it), PO, VAT.

Main tax rates in 2021 income tax 20% above EUR 35,300, increased to 40% corporation tax 12.5% ​​25% value added tax 23% 13, 5% (gas, coal, electricity, etc.) 4.8% (agriculture) 0% (books, children’s clothes) capital gains tax 33% from 05.12.2012 40%, 0% tax from deposit interest retention tax 37% from 01.01.2014 0% property transfer tax (stamp duty) 1-6% private – 1% up to EUR 1 million, 2% for the rest // commercial – 6 % (valid from 11 October) inheritance and gift tax (capital acquisitions tax) 33% (from 05.12.12) 0%

Source: Citizens Information Ireland

3 paragraph. Expected development.

Ireland Economy