As of now, Ireland is an open economy standing as high as fifth on the index of economic freedom only below the likes of Singapore, New Zealand, Australia, and Switzerland.The currency of the Republic of Ireland is euro unlike its land neighbor Northern Ireland which uses pound sterling. One can get an idea about the economic growth and economic development of Ireland from the fact that they rank fourth on both the IMF table, as well as, in the World Bank ranking out of 186 and 187, respectively.The Irish economy has had a topsy-turvy ride ever since the ’90s. It was one of the poorest countries in Europe prior to this point but the economic recovery post-war is known to be quite remarkable. From 1995-2000, the Irish economy steadily grew at an annual rate of 9.4%. Overall, it was the period of 20 years from 1987-2007 which saw Ireland’s GDP grow by a whopping 229%. It was during this period when it got the name, Celtic Tiger. There were a number of different reasons and multifaceted factors which saw such a rise in the Irish economy. Among all factors, the involvement of the European Union and foreign investment played the two most key roles in lifting the economic condition of the country. However, in 2007-2008 the Irish economy was severely affected by a recession which coincided with some banking scandals and also saw the breakdown of the Irish property bubble. The dramatic collapse was unprecedented but soon Ireland’s economy had recovered and was back on track. Although in order to recover, the Irish government took the assistance of IMF and the European Union to bail it out of the crisis, the country has made progress ever since then under the strict guidance of IMF and EU but is nowhere near its heights of the 2000s. The main components of Ireland’s economy are trade and export.If you enjoyed this article, why not also discover Ireland’s geography facts and Ireland culture facts here on Kidadl?Ireland Economy Ranking In The WorldIreland has one of the most impressive rankings in the world when it comes to economic fronts. Whether it is on the index of economic freedom or the IMF table or the World Bank, in each and every chart Ireland is present in the top five countries. This European country has a GDP of $399 billion and a GDP per capita of $89,431 according to the latest available data. The country roughly has a population of 5 million and had quite a low unemployment rate before the coronavirus pandemic struck, but ever since, its economy has been affected just like every other country in Europe, as well as, the entire world.Ireland’s economy depends upon exports to a large extent owing to a huge number of IT and Pharmaceutical companies of the US and several other countries who have established their headquarters in Ireland. Some of the products exported by Ireland include machinery and equipment, computers, chemicals, medical devices, pharmaceuticals, food, and animal products. The high economic ranking of Ireland is measured on different fronts including rule of law, government size, regulatory efficiency, and open markets. These categories have further subcategories which eventually decide the position of a country on how healthy its economy is and what rank it gets on the chart.Ireland has an overall score of 81.4 at the moment and sits fifth in the world in between Switzerland and Taiwan. Among European countries, though Ireland is second, at the same time, the overall score of Ireland is above the world as well as the European average. These statistics show us that Ireland’s economy is in a good place but a lot of credit for this goes to the multinational companies, especially from the US, that established their headquarters in Ireland.What is Ireland’s main source of income?Ireland’s economy has had a roller coaster ride since the early ’90s. The country’s national income largely came from agriculture earlier, but from 1990, Ireland transformed itself and went on an upward spree. Since 1987, the Irish free state saw its transformation of being heavily reliant on agriculture as its main source of income to a knowledge economy with a prime focus on the service sector and establishment of new high tech industries. There were a number of factors that led to this change, the primary reason being policies attracting foreign investment.As of this day, the Irish GDP per capita is one of the best in the world, making it one of the wealthiest countries in the world but if we take a look at the GNP per capita which is a relatively better method of judging national income, we will see that GNP per capita is significantly lower than the GDP.The underlying reason is the number of multinationals that operate from Ireland. They play a pivotal role in both increasing the GDP and decreasing the GNP, let us take a look at how this all began. It all began in 1987 when the then Irish government reduced corporate tax to as low as 12.5% followed by a reduction in public spending to promote competition. Intel was the first firm in 1989 to invest in Ireland, a number of companies like Microsoft and Google then followed. This began the process of economic growth of Ireland, the country’s income source shifted from agriculture to tech industries. There was a stark rise in employment rates with a 59% rise in private sector jobs. The policies of low corporate tax, policies favoring business houses, and a young and technology-oriented workforce played a key role in multinationals choosing Ireland as their base. With an increase in investment and a decrease in unemployment, consumer spending shot up. Voluntary pay pacts among the government, trade unions, and employers also played a pivotal role in implementing all these economic policies and improving the lives of the Irish people, but high growth rates is a double-edged sword as it led to high inflation with prices touching the sky. The real estate business was the biggest sector to feel inflation with a massive surge in property prices although the recession of 2007-08 saw the downfall of property rates once again.What are the most common jobs in Ireland?The latest census data available to track the employment rate and type of employment in Ireland is of 2016. The previously conducted census was of 2011 when Ireland was recovering from the 2007-2008 recession. The 2016 survey saw a number of positives regarding a rise in the employment rate of both males, as well as, females and a fall in the unemployment rate of youths belonging to the age group of 15-24 as well.The most common jobs as of 2016 in Ireland were that of sales and retail assistants or cashiers or people working as checkout operators. This sector employed the largest chunk of the total population as over 90,000 people worked in this sector. This sector was followed by farming, which came as the second most common job in Ireland employing around 69,375 people, roughly 3.5% of the country’s workforce. However, it was the IT sector that saw the largest increase in employment from the last census. There were around 21,000 new jobs in the IT sector which were closely followed by residential care and then by restaurants and the construction business. Immigrants, on the other hand, were largely involved in the accommodation and food industry, IT industry with 4,947 and 4,300 people employed in each industry, respectively. Going by the world employment rate, Ireland ranks 28th with an employment rate of 67.7%.How does Ireland’s economy work?Like most of the countries of the 21st century, Ireland has a mixed economy and is also a part of the European Union, enjoying the entire market. The currency of Ireland is euro which is the currency used in the European Union. The Irish economy favors privatization in various industries but sectors such as rail, road transport, radio, television, and electricity generation are operated by semi-state bodies, an amalgamation of state and private bodies.Ireland’s economy was earlier highly dependent on agriculture owing to the country’s favorable climatic conditions and lush green pastures. Most of the farms follow the practice of mixed farming and are owned by families. The country isn’t very rich in terms of natural mineral resources and largely depends on imports for fulfilling its energy requirements. The boom in Ireland’s economy was seen in the ’90s when corporate tax was made as low as 12.5% to attract business investment from companies around the world. This boom saw the country of Ireland enjoy staggering rates of economic growth, more than most of the other countries in the European Union. However, at one point this exponential growth halted and the Irish banks turned towards the mortgage and real estate to maintain the same level of growth but it was just a bubble with no capital support. The recession of 2008 saw Irish banks in particular and the entire economy, in general, being bailed out by IMF and World Bank, ever since the Irish economy has been more carefu. A large chunk of its income still relies on the hands of multinationals. This is a drawback of the Irish economy model which shows high GDP rates but low GNP rates which are actually the reflector of national income. As of 2019, Ireland had a national debt of $248.56 billion which was projected to be around $300.98 billion in 2021.Here at Kidadl, we have carefully created lots of interesting family-friendly facts for everyone to enjoy! If you liked reading these 121 Ireland economy facts for the budding economist in you, then why not take a look at Northern Ireland facts or things to do with kids in Ireland?
As of now, Ireland is an open economy standing as high as fifth on the index of economic freedom only below the likes of Singapore, New Zealand, Australia, and Switzerland.
