Irish economy grew in 2020 despite pandemic
Ireland’s economy powered higher last year, bucking the coronavirus-driven global downturn, as the eurozone member enjoyed booming pharma and IT exports on strong pandemic demand, the government said Friday.
Gross domestic product (GDP) growth jumped 3.4 percent in 2020, said finance minister Paschal Donohoe.
Ireland fared better than bigger eurozone economies Germany and France, which plunged into recessions last year as Covid shut down the global economy.
Donohoe described the GDP growth as “remarkable”, adding it “is entirely a result of the growth in exports”.
Despite a slowdown in global demand, Irish exports grew 6.25 percent last year, according to figures from the country’s finance ministry.
“The pharma and ICT (Information and Communication Technology) sectors recorded extraordinary export growth, driven by blockbuster immunological drugs, Covid-related products, and the shift to home-working,” Donohoe said.
Ireland’s multinational export sector has a warping effect on the headline GDP figure of the nation — home to five million people.
Modified domestic demand — a figure that strips out the effects of multinationals — registered a 5.4-percent slump in 2020.
Donohoe said it is “a figure much closer to the typical fall across advanced economies”.
The Irish finance ministry said there had been a “two-speed impact of the pandemic” on the economy as multinational corporations drove the highest level of exports on record.
Meanwhile domestic activities are “bearing the brunt” and “indigenous exports” of food and drink slumped, according to Donohoe.
He pledged the government will “continue to cushion, in as much as possible, the contraction in private-sector demand” before attempting “to balance the books”.
The minister said more than one million people in Ireland are receiving state-income supports as “the labour market has been turned on its head”.
In a speech, Donohoe said job losses had been concentrated in public-facing sectors with the harshest levels of unemployment among young workers.
Ireland has unveiled a 2021 budget package with additional spending of more than 17.75 billion euros, as the nation deals also with fallout from Brexit.
Ireland has suffered 4,396 deaths from the coronavirus, according to latest official figures, and its third lockdown is due to last until at least next month.
After navigating two previous waves of the pandemic with low case and death figures, the virus surged at the start of the year.
In early January, the nation had the highest infection rate per capita in the world, according to Oxford University data.