The Irish economy grew by just 0.3 per cent last year as volatility in the multinational sector weighed on headline growth, according to preliminary estimates from the Central Statistics Office (CSO).
The latest figures show the economy ended 2024 on a weaker note, with growth as measured by GDP (gross domestic product) contracting by 1.3 per cent in the final quarter following an uptick of 3.5 per cent in the previous quarter.
Overall, this meant Irish GDP rose by 0.3 per cent for the year as a whole compared to a contraction of 5.5 per cent in 2023.
The figures were heavily skewed by statistical distortions associated with “contract manufacturing” in the multinational sector, whereby goods produced in other countries have their profits counted in Irish GDP.
While GDP is generally the preferred yardstick for growth internationally, it is considered a poor measure of the Irish economy because of contract manufacturing and the flow of assets, including intellectual property (IP) and leased aircraft, through the multinational sector here.
Figures for modified domestic demand (MDD), considered a more accurate measure of the domestic economy, will be published later in the year.
Robert Purdue, head of dealing for Ireland at global financial services firm Ebury, described the fourth quarter GDP numbers as a disappointment.
However, he noted “[US president Donald] Trump’s seemingly softer stance on tariffs since his inauguration will offer some relief to Irish businesses, especially exporters, who have been anticipating a tougher global trade environment in the year ahead.”
“Markets are fully pricing in another ECB rate cut at Thursday’s meeting, which should provide some support to consumer and business confidence,” he said.
“However, the focus will be on [ECB] president [Christine] Lagarde’s comments for insights on where the ECB sees interest rates eventually settling, and the pace of cuts over the next 12 months.
“With a mixed outlook for the start of the year, and uncertainty around Trump’s tariff plans remaining, Irish businesses must remain agile – securing flexible financing, managing FX risks, and staying prepared for changing conditions will be crucial to navigating the challenges ahead and seizing any opportunities that arise,” he said.
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