Irish exports amount to 140% of GDP , in marked contrast to the EA average of around 50%, so domestic demand has little impact on Irish headline growth. Services actually account for over half the Irish export figure, perhaps contrary to perceptions, given the headline emphasis on goods exports, notably Pharma.The latter did rise sharply from late 2024 through early 2025, notably to the US, ahead of what was seen as the imposition of tariffs. That was a big factor in Ireland’s GDP growth figure last year (12.3%) although that all occurred in the first quarter, with GDP actually falling through the remainder of the year.<\/p>\n\n\n\n
The fall-off in Pharma exports to the US has certainly been a big factor but service exports have also been weaker, a picture still evident in the first quarter GDP data. Exports fell by 7%. with goods down 13.9% and services falling by 1.7%, leading to a 12.1% contraction in GDP. Ireland’s GDP is only 4% of the EA total but that scale of decline had a material impact on the overall 0.2% fall in EA GDP, contributing almost -0.5 percentage points.<\/p>\n\n\n\n
On an annual basis GDP fell by 17%, with exports down by 13% . We did expect a GDP contraction over the full year, of 2.5%, but now expect that to be around 10%. However, the weak export performance has also led to a much slower growth in net profit outflows, so GNP, which adjusts for such flows, is likely to grow by over 3.8%.<\/p>\n\n\n\n
The domestic components of GDP are also likely to continue to grow, with personal consumption rising by 2.5% and Government consumption up by 3.7%. Construction spending is rising and may increase by 5%, but overall capital formation is forecast to decline on the back of a fall in Intangibles.However, modified domestic demand is set to grow by around 3.5%, and employment is also seen rising, albeit by only 1%. If GDP does indeed fall sharply it will push up the debt ratio, which we see rising from 33% to 36%.<\/p>\n","protected":false},"excerpt":{"rendered":"
Irish exports amount to 140% of GDP , in marked contrast to the EA average of around 50%, so domestic demand has little impact on Irish headline growth. Services actually account for over half the Irish export figure, perhaps contrary to perceptions, given the headline emphasis on goods exports, notably Pharma.The latter did rise sharply … Continue reading “Irish GDP may contract by 10% this year.”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-473","post","type-post","status-publish","format-standard","hentry","category-irish-gdp"],"_links":{"self":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=473"}],"version-history":[{"count":1,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/473\/revisions"}],"predecessor-version":[{"id":474,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=\/wp\/v2\/posts\/473\/revisions\/474"}],"wp:attachment":[{"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/danmclaughlin.ie\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}