Ireland continues to stand out as one of Europe’s most dynamic and resilient economies. This is the picture painted by the latest Joint Economic Note issued by the Italian-Irish Chamber of Commerce and the Italian Trade Agency. With a population of 5.3 million and a GDP of €493.5 billion at constant market prices, Ireland maintains a strong position on the global economic stage.
Currently the 26th largest economy worldwide and 4th in terms of GDP per capita, Ireland also boasts a positive trade balance of nearly €22 billion. Domestic growth, measured through Modified Domestic Demand (MDD), is forecast at +2.7% for 2024. This metric, which filters out the distortive effect of multinational operations, reflects the true state of domestic economic activity. Inflation remains contained at 2.1%, and unemployment is at a low 4.5%—further evidence of a stable and robust labour market.
Economic performance in 2024 has been supported by expansionary fiscal policies, strong consumer demand, and easing external inflationary pressures. While the final quarter of the year saw a small contraction in GDP (-1.3%) due to a slowdown in multinational-led industrial activity, overall annual growth remains slightly positive (+0.3%).
Irish households continue to show financial strength, with average savings of €77,000—among the highest in the Eurozone. The labour market is particularly strong, achieving near full employment. Employment grew by 2.8% between January and September, reaching a record employment-to-population ratio of 75.3%. High-skill sectors such as professional services, public administration, and ICT continue to expand, further boosted by inflows of skilled migrant workers.
However, the real estate sector remains under pressure. Housing supply lags far behind demand, with a shortfall estimated at up to 256,000 units. Median home prices rose to €350,000 in October 2024, up nearly 10% year-on-year. New housing completions are slightly down, while rental prices continue to increase, particularly in Leinster and Munster. The government plans to deliver 50,500 new homes annually through 2032, with 41,000 expected in 2025.
Challenges such as high building costs, planning delays, and labour shortages continue to weigh on the sector. The Central Bank of Ireland has warned that without significant investment in infrastructure—especially housing, transport, and energy—future growth may be constrained.
Despite these challenges, the overall outlook remains optimistic. Ireland’s competitive economy, strong labour market, high household savings, and expanding high-value sectors provide a strong foundation for future growth. With the right investments, Ireland has the potential to strengthen its long-term economic sustainability.
Kelmer Group supports Italian businesses looking to expand into high-potential international markets like Ireland. Whether you’re evaluating new opportunities or looking to consolidate your presence, our team is here to assist you.