ESRI Predicts Solid Growth for Ireland’s Domestic Economy in Next Two Years, Highlights Infrastructure Challenges

By Eleanor Harrison Mar27,2024
Ireland’s economy expected to experience growth over the next two years

The Economic and Social Research Institute (ESRI) has predicted that Ireland’s domestic economy will see solid growth in the next two years, with modified domestic demand (MDD) expected to increase by 2.3% this year and 2.5% next year. MDD is a measurement that eliminates the impact of multinational companies on Ireland’s economy, providing a more accurate representation of domestic economic activity.

Inflation and higher interest rates affected spending and investment in 2022, leading to a slow growth rate of just 0.5% for MDD. However, the economy recovered strongly from the pandemic in 2023 but slowed significantly due to higher inflation putting a strain on households and limiting real pay growth. Real pay, adjusted for inflation, is an important measure of changes in living standards, and it is essential for economic growth and stability.

Gross Domestic Product (GDP) is the typical measure of economic performance, but it is heavily distorted by multinational activities in Ireland. In 2023, Irish GDP actually shrank by 3.2%, reflecting the impact of US pharmaceutical firms coming off their pandemic highs. The ESRI anticipates a rebound in Irish GDP over the next two years as global trade improves.

The think tank highlighted the importance of addressing infrastructure bottlenecks as a critical challenge for Ireland’s economy moving forward. This includes issues related to housebuilding, renewable energy, and public transport. For example, plans for an underground rail link between Dublin Airport and the city center have been in the works for over 20 years, underscoring the need for timely and efficient infrastructure development to support economic growth and prosperity in Ireland.

The ESRI also emphasized that addressing these challenges requires collaboration between government agencies, private sector companies, and civil society organizations to ensure sustainable development that benefits everyone in society.

Overall, while there are still challenges ahead for Ireland’s economy

By Eleanor Harrison

As a content writer at newseasoning.com, I infuse flavor into words, crafting compelling stories that captivate and inform our audience. With a keen eye for detail and a passion for creativity, I strive to create content that not only engages but also inspires. Whether I'm concocting a savory blog post or whipping up a spicy product description, I pour my heart and soul into every piece I write. Join me on this flavorful journey as we explore the tantalizing world of content creation together.

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