The Irish economy and the Global Market
Is Ireland’s economy doing well?
Ireland is facing the same pressures as its neighbours over the cost of living and energy security. Ireland has enjoyed many years of back-to-back economic growth but with recent geo-political events, there has been a strain on the global economy. 2022 started with a cautious optimism and gradual ease of Covid-19 restrictions in Ireland and globally. Ireland has still with all of this provided access to international markets and global talent– even the Ukrainians.
These global-domestic interdependencies have been important drivers of Ireland’s economic fortune over two decades. There is easy access to both European and UK markets because of the country’s skilled and open labour market, talent pipeline and easy access. The European and UK markets are likely to contribute to its growth in the coming years especially in sectors like ICT and Life Sciences.
Although the UK, EU and US are currently facing a risk of recession which can create the risk of a downturn in Ireland; However, Ireland has been able to mitigate the risk through diversification of its export focused economy. The outcome of this would not be fully felt until 2023 because of the uncertainty in the European and global Market.
Read more about Migrants and the Irish Economy here.
What is Ireland’s Growth rate?
Ireland saw economic growth increase by 2.3% between July and September 2022. Ireland is ranked 11 on the 2022 IMD World Competitiveness Ranking table, up from 13 in 2021. This is probably because of its access to educated and well-connected business partners in a commercial and common law environment. Ireland is a feasible test market for U.S. small-medium enterprises (SMEs) looking to export for the first time into Europe because of its strategic geographical location and also the country as a gateway to Europe with access to a wider market of 742 million people.
Ireland is highly responsive to U.S. products and services; this creates a fertile market for American brands across all sectors. U.S. goods and technologies are perceived to be of high quality, and U.S. companies receive support from local partners, helping to further export goals for Ireland and the European marketplace.
Over the years, Ireland has been the fastest growing economy in Europe. The prospect for Ireland’s future is positive despite the increasing inflation, rising energy prices, and continued global challenges. Ireland’s GDP growth forecast for 2022 is predicted to be in excess of 12 percent supporting a sustained demand for U.S. products, technologies, and services in the short to medium term.
The IMF forecasts growth in GDP (Gross Domestic Product) terms of 6% this year and 5% next year. It expects inflation to average 6.5% in 2022 before falling to 2.8% in 2023. Inflation across the eurozone remains high, falling slightly in November to 10%. Irish inflation also declined slightly, with Eurostat reporting a fall from 9.4% to 9% in November 2022.
The Irish economy is small but globalised and as a result is more sensitive to developments around the world. It is more volatile than its peers across a range of macro-financial variables and it is more prone to structural macroeconomic shocks. But its openness and connectedness is also a source of strength.
Migrants in the Irish economy
There is obvious evidence that in general, countries benefit economically from inward migration of workers. One of the vital benefits is that inward migration tends to reduce the age profile of the workforce, because it is normally the younger age group who tend to migrate. This is important for many countries in the developed world. Low-skilled immigrant workers very often take the jobs that native workers may not be prepared to do themselves. There has certainly been strong evidence of this in Ireland in recent years.
The nature of migration is changing, with high-skilled labour becoming a more significant component of global migration. Ireland has successfully attracted international students in recent years. Non-Irish nationals play a key role in the Irish economy and will play a key role in the future as both employees and employers.
