While this is a short account of how well the economy is doing according to the figures, we should remember that the economy and the figures it produces really comes down to people. Energy, talent, judgement, and emotional intelligence are key elements defining our economic agency. And for our diplomats abroad, we have a great story to tell about recovery, resilience and dynamism. What the figures show about us is that despite the many uncertainties in our near-abroad – sterling fluctuations, sluggish Eurozone, Brexit referendum – we are proving to be a resilient people.
Our GDP grew by 7.8% in 2015, according to preliminary estimates by the Central Statistics Office. This is the strongest year of annual GDP growth since 2000, making Ireland the fastest-growing economy in the EU last year. The European Commission forecasts the same again for this year. GDP per capita is back above its pre-crisis peak. GNP – often regarded as a better measure of economic activity in the Irish economy – is estimated to have grown by 5.7% last year.
The increase in economic activity we are now seeing is broadly-based. Our economic fundamentals are robust. Export growth in 2015 was the strongest since 2000 at 13.8% and exports continue to contribute positively to growth, boosted by competitiveness and fair winds from exchange rate depreciation.
Unlike the early part of our recovery from the 2008 crisis which was driven almost solely by trade, the domestic economy is now helping drive growth once again, with private consumption up by 3.5% last year. Consumer sentiment continues to rise. Investment growth is strong. As a result, the key measure of success is unemployment which in May was down to 7.8%, from a peak of 15.1% in 2012. Indeed, employment has increased in each of the last thirteen quarters.
Ireland has maintained a phased and steady adjustment path putting our public finances on a sustainable footing. Strong economic growth has underpinned robust tax revenue growth during 2015, up approx. 10.5% on 2014. The General Government Deficit has been reduced from over 32% of GDP in 2010 to an estimated 1.5% of GDP in 2015, and is expected to move even lower this year.
Ireland’s debt to GDP ratio is also on a firm downward trajectory. Having peaked at 120% of GDP in 2012, it is calculated to have fallen to below 97% in 2015. That is quite a turnaround. Our debt is now rated as investment grade by all major ratings agencies. It is not surprising then that Ireland has successfully made a full return to the bond markets, and February and April saw 10-year bonds auctioned at a new record low yield of under 1%.
DG Trade Division
Department of Foreign Affairs and Trade