The economy of Ireland is largely driven by services, which make up around 70% of the country’s GDP. The services sector includes finance, business services, and public administration. Other key industries in Ireland include agriculture and food production, manufacturing, and tourism. Ireland has a highly educated workforce which has enabled it to become an attractive destination for foreign direct investment (FDI). In 2019, FDI accounted for over one-third of all investment in the country.
According to cheeroutdoor, Ireland is the second-largest exporter of software in the world and has become one of Europe’s leading technology hubs. The country also boasts a strong pharmaceutical industry, with many global companies having operations in Ireland. Agriculture plays an important role in the Irish economy, with dairy products being one of its major exports. The manufacturing sector is also a significant contributor to GDP growth with large multinationals such as Dell and Intel having major operations based in Ireland.
Tourism is another major pillar of the Irish economy with over 10 million visitors arriving each year from all over the world. Dublin is one of Europe’s most popular tourist destinations while other cities such as Galway and Cork are becoming increasingly popular amongst visitors as well. This influx of tourists brings money into local communities which helps to support businesses across the country.
The Irish government has implemented a number of policies to help stimulate economic growth including corporate tax incentives for foreign investors, increased spending on infrastructure projects, and targeted investments in research and development (R&D). These measures have helped to create an environment that encourages foreign investment into the Irish economy while also helping to create jobs for local people. Despite these efforts however there remains significant challenges facing Ireland’s economy including high levels of public debt, slow wage growth, and rising inequality levels among its citizens.
Business and Economics
Abbreviated as IRL by abbreviationfinder.org, Ireland was primarily a farming country for a long time. In the 1960s and 1970s, the industrial sector grew, but the 1980s saw a deep economic crisis with high unemployment. After the crisis year of the 1980s, the economy underwent a rapid transformation, and agriculture today plays a more obscured role than before.
From 1995-2007, Ireland had an average GDP growth of 6 percent per year, and the country began to be called the Celtic Tiger. Foreign investment led to the emergence of a high-tech industry. The recipe for success was EU contributions, low corporate taxes that attracted foreign companies and a well-trained workforce.
However, around the middle of the 1990s, growth began to slow down and in 2008 the country was hit by a sharp recession with the subsequent collapse of the domestic real estate and construction market and a severe banking crisis. At the end of 2010, Ireland received emergency loans from IMF and EU support funds. In connection with this, the government prepared a comprehensive austerity package.
The measures did not have the desired effect in 2011 and 2012, but at the end of 2013 several positive signals came as unemployment began to fall and housing construction increased. At the end of 2013, Ireland was able to announce that it had rescued the rescue programs from the aid funds. Thereafter, the economic recovery continued and in 2018 the country had a GDP growth of 8.2 percent, which is the highest in the EU area.
|Year||Change in GDP (%)||Government debt share of GDP (%)||Budget deficit or budget surplus share of GDP (%)||Inflation, CPI (%)||Unemployment of total workforce (%)|
Source: IMF, OECD and World Bank
Irish agriculture is dominated by smaller family farms. Many of the farmers are partly provided with other employment. Ireland has a sunny, rainy and mild climate that is unsuitable for grain cultivation but better for livestock management. The country is the EU’s largest exporter of beef.
The importance of agriculture to the Irish economy has diminished, but agriculture plays a greater role in Ireland than in most other Western European countries. About two-thirds of the land is agricultural land, but only 13 percent of it is agricultural land; 20 percent of grassland is cultivated, and a full 67 percent is pasture. Animal production is of great importance, and beef and milk are the most important products. The most common crops are potatoes, sugar beets, barley and wheat. The entry into the European Communities (1973) led to new marketing markets and higher prices for Irish products. Initially, the country received major regional support, but in the 1990s they declined significantly.
- Paulsourcing: Top 10 tips for doing business in Ireland, covering country profile and market entry requirement.
State forest planting has been ongoing since the 1930s and has resulted in a tripling of the forest area. Despite this, only 11 percent of Ireland’s area is covered by forests. Just over 65 percent is owned by the state.
Although the surrounding coastal waters are rich in fish, fishing plays only a marginal role. The most common species of fish are mackerel and herring, but the country is also known for its crab fishing. In addition to sea fishing, salmon fishing occurs in the rivers as well as extensive salmon farms.
Ireland is rich in commodity resources, but the sector only makes an economically marginal contribution; minerals make up 1 percent of the export value and the mining industry contributes 1 percent to GDP.
Ireland is the largest zinc producer in Europe and one of the largest in the world; lead recovery is also significant. Lead and zinc are mined in mines north of Tipperary, in Tynagh and in Navan, where Europe’s largest mine is located. Aluminum and silver are also mined.
Gas is extracted at sea off Kinsale southeast of Cork and peat is harvested in the central parts of the country.
Ireland imports 90 percent of its energy needs, primarily oil and gas. Own production consists mainly of peat and natural gas, but 40 percent are renewable fuels. Of the total energy use, 5 percent is made up of renewable energy sources and the goal is to increase this proportion to 30 percent by 2020.
A state-owned company has broken peat since the 1940s and this type of energy is still significant for large-scale electricity generation and household needs. Organic interest organizations have put pressure to save the unique peatlands for Europe.
For many years, Ireland’s industry was characterized by small-scale and low-technology, focusing on the domestic market. After the country’s entry into the EC in 1973 and especially during the 1980s, the industry developed rapidly. With the help of generous location grants, tax relief, state aid for research and development and, after 1993, access to the EU internal market, the country managed to attract foreign, mainly US and Japanese, major companies in the electronics and pharmaceutical industries.
Nowadays, the country has a high-tech, capital-intensive and export-oriented industry, largely owned by foreign groups from the USA, the UK and Japan, among others. The industry is concentrated mainly in the Dublin region and the area around Shannon International Airport north of Limerick. The traditional food sector (slaughterhouses, breweries, distilleries, sugar refineries) has been supplemented by the pharmaceutical, electronics and chemical industries.
Ireland has had a deficit in the balance of trade during much of the post-war period, but since the 1980s there has been a surplus. About 1/3 of foreign trade is done with the UK; other important trading partners are other EU countries, the US and Japan. Important export goods are machines, computers and pharmaceuticals. The most important import goods are electronic components, machinery, oil products and chemical products.
- COUNTRYAAH: Find major trading partners of Ireland, including major exports and major imports with latest trade value and market share as well as growth rate.
Tourism and gastronomy
Ireland is considered to be one of the world’s best tourism organizations in terms of development and marketing, and this has also resulted in high visitor numbers and tourist revenue. The country is visited annually by 6-7 million visitors. Most come from the UK, the rest of Europe, the US and Canada. Ireland has launched itself as “the green island”, where, above all, the beautiful scenery and age-old lifestyle attracts tourists. Killarney on the southwestern part of the island and the entire west coast with its steep cliffs are well-visited tourist destinations because of the mild climate and natural beauty. Other destinations are the cities of Dublin, Kilkenny and Cork. All over the island there are monasteries and churches from the Middle Ages. There are also many Celtic monuments here. Golf is a popular sport in Ireland, and therefore golf courses are everywhere.
Note: the capital city of Ireland is Dublin with a population of 1,400,000 (including suburbs, 2019 estimate). Other major cities include Cork with a population of 126,000, Galway with a population of 80,000, Limerick with a population of 58,000, Waterford with a population of 48,000 (2016 census).
Although the island is surrounded by sea and flooded with countless streams, Ireland, like the United Kingdom, is a carnivorous country. Traditional Irish home cooking rarely includes fish recipes, but Irish stew, cooked on mutton, potatoes and other root fruits, drisheen (blood sausage) and champ (mashed potatoes with milk and vegetables). However, the potatoes, the crop the poor peasants were persuaded to focus on, which caused starvation when the island was hit by potato plague in the mid-19th century, have been farmer’s rescue for other years and are part of a number of everyday recipes such as bread, cakes, pancakes etc.