Ireland Shows Highest GDP Growth in EU as Tax Records Reach Record High

Ireland recorded the highest growth in Gross Domestic Product (GDP) in the eurozone, in quarter 2 of this year, new figures show.  

 

Data from Eurostat, shows that Ireland’s GDP grew at 3.3 percent between April and June when compared to the previous 3 months. After Ireland, Lithuania had the next largest increase at 2.8 percent.  

 

When Ireland's GDP was compared to the same period last year, the growth was 2.8 percent.  

 

GDP in Spain and France grew by 0.4 percent and 0.5 percent respectively when compared with quarter 1 of this year. However, Germany, the biggest country in the bloc, did not record any growth while Italy recorded a decline of 0.3 percent. 

 

Among the other countries who recorded declines in GDP were Sweden which dropped 1.5 percent, Latvia was down 0.6 percent, and Austria was down 0.4 percent. 

 

Overall, the eurozone seasonally adjusted GDP grew by 0.3 percent in quarter 2, compared to quarter 1 of this year. Compared to the same period last year, eurozone GDP grew at 0.6 percent. 

 

Ireland’s outpacing of the eurozone economy comes as 91 percent of respondents to AmCham’s latest FDI Insights survey said they have a positive view of Ireland as an investment and growth location. In the same survey, 64 percent of respondents said they expect the number of employees in the Irish operations of their organisation to grow over the next 12 months.  

 

Separate figures from the Department of Finance this week show that tax revenue for the seven-month period to the end of July stood just under €48 billion. This was €4.3 billion or 10 percent ahead of the same period last year and represented the highest tax take for the first seven months of any year. 

 

On a cumulative basis, corporation tax generated €10.9 billion for the seven-month period, €1.9 billion or 20.7 percent higher than in the same period last year. Receipts from corporation tax are expected to hit a record of between €24 billion and €26 billion this year. 

 

Minister McGrath has said he plans to put a significant portion of excess corporation tax receipts into two new funds, a public investment fund and a sovereign wealth fund. The first will be used for capital spending on vital infrastructure while the other will be kept as a buffer against future economic shocks and could potentially fund age-related costs in the future. 

 

AmCham has consistently highlighted the importance of ensuring sustainable public finances and has welcomed commitments from Government to ringfence high corporate tax revenues.   

 

When prioritising capital expenditure, 60 percent of respondents to AmCham’s latest Quarterly FDI Insights survey, said that housing is the area of infrastructure development that requires the most urgent investment from Government followed by energy at 20 percent and transport and connectivity at 15 percent.   

  

In the same survey 82 percent of respondents said that Ireland should implement a triage system to prioritise critical infrastructure and investments within the planning system.  

 

To engage with AmCham on topics related to capital investment and critical infrastructure, please contact Colm O’Callaghan, Director of Public Affairs and Advocacy at c.ocallaghan@amcham.ie.