The remarkable economic growth can be attributed entirely to the large presence of multinational corporations fighting Corona. Decline in domestic demand.
While all other European countries saw their Gross Domestic Product (GDP) drop by 6.8% in 2020, the Irish economy grew by 3.4%. This is what Irish Finance Minister Bashal Donohue said on Friday. The difference is big with the neighboring country, the United Kingdom. In the past year, this was the biggest economic downturn since 1709.
Many international pharmaceutical and technology companies have established their headquarters in Ireland due to the favorable tax regime.
The fact that the economy grew in a pandemic year, with Ireland experiencing one of the strictest lockdowns in Europe, can be attributed entirely to exports. According to Donohoe, he’s grown 6.25 percent. The pharmaceutical and ICT sectors in particular have performed “exceptionally well” thanks to the sale of coronavirus-related products and the boom in domestic work. Several major international pharmaceutical and technology companies have established their headquarters in Ireland due to the favorable tax regime.
So Donohue warned that GDP is not the best indicator of the state of the economy. Excluding the impact of multinational corporations, the Irish economy contracted by 5.4% last year. The cultural sector was particularly hit (-54.4%), but the construction sector (-12.7%) and the hospitality sector (-16.7%) were hit hard.
Donohoe expects the domestic contraction to continue during the first three months of this year, although it will be less severe than in the spring as sales appear to be picking up.