Ireland’s economy: A solid recovery

Minister for Finance, Ireland

©AFP ImageForum

The recovery in the Irish economy is well underway. Determined policy responses to the fiscal, economic and financial sector challenges Ireland faced are now bearing fruit, with Ireland expected to be among the fastest-growing economies in the OECD this year and next. 

The recovery has gained momentum over the last two years, with GDP expanding by over 5% in 2014, and by 7% in the first three quarters of 2015. GDP per capita is now above the pre-crisis peak recorded in 2007.

The expansion in economic activity, initially led by the exporting sectors, has become more sustained, with domestic demand now making a strong positive contribution to growth. Companies are once again investing in the real economy, and household consumption is expanding thanks to growing employment and rising household incomes.

I have always regarded the labour market as the best barometer of trends in the Irish economy and am particularly pleased that the latest figures show broad-based employment growth across the Irish economy, with increases recorded throughout the country and in virtually all economic sectors. The latest figures show that 140 000 net jobs have been created since the low point of the crisis, representing an 8% increase in the level of employment. As a result, the unemployment rate fell to 8.8% by December, representing a decline of over 6 percentage points from its peak in 2012. This however is not the end point; policy efforts will continue to focus on further reducing the unemployment rate.

These are significant achievements and are testament to the continued success of the whole-of-government approach we have taken in addressing the challenges in the labour market. Our approach, which has focused on both the supply and demand sides of the market, is based on reactivating the unemployed through education, training and mentoring, and creating the right conditions for the private sector to create employment.

Putting the public finances on a sound and sustainable footing has been another key priority of the Irish government. Put simply, stable public finances are a pre-requisite for economic growth. To that end, the government set out a series of fiscal targets to bring down the deficit on a phased basis, which I am pleased to say we overachieved each and every year. The underlying deficit fell from 8.6% of GDP in 2011 to an estimated 1.5% of GDP in 2015, with Ireland set to exit the Excessive Deficit Procedure as a result.

We were careful to ensure that consolidation measures were strategically implemented in a manner that was least damaging to economic growth. In line with OECD research and recommendations, we have broadened the tax base through curtailment and elimination of tax expenditures, and reduced revenue volatility by focusing on more sustainable tax bases.

This is but one example of the great assistance the OECD’s expertise and independent advice has been to Irish policy makers throughout the crisis. More recently, I would like to thank the OECD for its work on the 2015 Economic Survey of Ireland, which provides a prescient analysis of the challenges now facing Ireland. The survey, along with previous OECD research, has highlighted the need to improve the tax and welfare system to remove potential disincentives to work. The government has sought to address these problems by lowering marginal tax rates faced by middle earners, a group that, as the OECD has shown, faces high marginal rates.

I also welcome the OECD’s focus on the theme of inclusive growth in the survey. The economic recovery has not yet filtered through to all; ensuring an inclusive recovery where the economic benefits are widely spread is a key objective for us, and the best way to achieve that is to ensure a return to full employment.

Ireland is moving further along the road to recovery. We have regained our competitiveness and stabilised our public finances, and are making significant progress in bringing the economy back to full employment. We have laid the foundations for a solid and sustained recovery. The task now is to build upon the gains we have made in recent years and to keep the recovery going.


Noonan, Michael (2011), “Ireland: Confident of a return to force” in OECD Observer, No 284, Q1, OECD Publishing, see

OECD (2015), OECD Economic Surveys: Ireland, Paris

©OECD Observer No 305, January 2016

Economic data

GDP growth: +0.6% Q4 2017 year-on-year
Consumer price inflation: 2.2% Jan 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.5% Jan 2018
Last update: 12 Mar 2018


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Ambassador Aleksander Surdej, Permanent Representative of Poland to the OECD, was a guest on France 24’s English-language show “The Debate”, where he discussed French President Emmanuel Macron’s speech at the World Economic Forum in Davos.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Papers show “past coming back to haunt us”: OECD Secretary-General Angel Gurria tells Sky News that the so-called "Paradise Papers" show a past coming back to haunt us, but one which is now being dismantled. Please watch the video.
  • When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. But I know that the reality is still so much different. By Alda, 18, on International Day of the Girl. Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018