Ireland

Ireland’s GDP is notoriously volatile because of large profit-shifting strategies by multinationals between Ireland and the rest of the world, which create large swings in intellectual property flows. But alternative indicators such as modified domestic demand (MDD), which excludes spending that has little relation to domestic activity, show that the Irish economy has massively outperformed the Eurozone since the pandemic. 

The strong economic performance can be attributed to the presence of multinational corporations (notably in the technology, pharmaceutical, chemicals and financial sectors), solid exports to markets such as the US, a skilled labor force, strong immigration inflows and a low structural unemployment rate. The US accounts for 30% of Ireland’s goods exports and much of the inward investment has created well-paid jobs. 

The imposition of US tariffs by the US on the EU – to which Ireland belongs – is not a cause of major concern for the Irish economic model and its growth prospects. While more than half of Ireland’s pharmaceutical exports go to the US, a 10-15% tariff is manageable to absorb for the highly competitive Irish pharmaceutical sector.  Moreover, Ireland has significant economic strengths. Its economy is built around high value-added services and the government has significant fiscal buffers to mitigate any cyclical downturn.  

Business insolvencies have plateaued at elevated levels. While they are far off the peaks reached during the banking and sovereign crisis of the 2010s, insolvencies remain elevated, partly a reflection of rapidly changing business dynamics and demand patterns.

Ireland's business environment is very strong, scoring highly in regulatory quality, rule of law and corruption control. Overall, it had the 3rd best ranking of economic freedom in the world in 2025. 

Ireland also has a very well-educated labor force and enjoys a significant openness to foreign trade and FDI. In particular, starting a business, protecting minority investors, paying taxes and resolving insolvencies are ranked at the top among other OECD high-income countries. Going forward, the introduction of the minimum global corporate tax reform is expected to only modestly dampen Ireland's attractiveness, amid significant strengths of the Irish economy that will attractive to corporates. 

On sustainability, our proprietary Environmental Sustainability Index places Ireland at 33th out of 210 economies. Ireland scores well on low CO2 emissions and low water stress, but is lagging behind some peers on recycling, energy use and renewable electricity production.