Due to the small size of the island, it’d be easy to believe that the Republic’s Gross Domestic Product (GDP) has a cap, yet the country’s output has grown exponentially since 2016 and doesn’t show any sign of slowing down. Ireland is today nestled between Austria and South American country Argentina on the list of the world’s largest countries by GDP, a position that places it above even traditional powerhouses like Hong Kong, Singapore, and Malaysia.
The Multinational Sector
However, while the Irish economy is still in a rebound for obvious reasons, its GDP is set for a significant rise due to the activities of multinational or foreign corporations. Investment group Davy intimates that Ireland’s GDP is in something of a positive flux, though, after revising predictions upwards on two occasions in August. Overall, the GDP forecast has grown from 4.8% to 15% on the back of results from the second quarter.
To understand all these numbers, it’s important to know where the Republic’s money comes from. Ireland is one of the largest exporters of pharmaceuticals in the world, with at least 26 factories based throughout the country. Major names in residence include Pfizer, GSK, Johnson & Johnson, and US company Lilly. This group of companies form the keystone in Ireland’s multinational sector, where much of the recent GDP growth comes from.
Of course, there’s more to the country’s economy than medicines. As in many countries, technology is a major contributor to GDP but Ireland stands alone in terms of the sheer volume of investment received from the United States. The presence of IBM, Microsoft, Facebook, Google, and Apple in Ireland means that foreign investment in technology exceeded one trillion Euros in 2019.
The Tourism Industry
Locally, Ireland’s casino industry has posted significant growth, to almost doubling in size between 2020 and 2021, with receipts of €40.6m. IrishLuck.ie – a casino comparison site, notes that the Casumo, Emojino, and Rocket operators are among the most popular in the country, with advancements in withdrawal speed and game quality contributing to the sector’s recent growth. Ireland now accounts for 2.6% of Europe’s online gambling revenue.
Some expectations have been reevaluated, though. Prospective GDP growth for Irish companies has actually been revised down recently, from 8.7% to 5.2%. A crash in the tourism industry is partly to blame for this slump, as it incorporates so many other sectors, including transport, hotels, restaurants, galleries, and museums. However, overall consumer spending is climbing, which hints at recovery in Q3 and Q4, which culminates in the usual Christmas buying frenzy.
Ireland is one of the most productive countries in the world as far as exports and catering for multinational companies is concerned. Up-and-coming industries such as FinTech, IT, and more general financial services could provide an additional boost to the native Irish economy over the next few years. Overall, expect the Republic’s GDP to continue to grow in tandem with the medical technology sector and tourism, once the latter makes a return to the island.