2012 in the past
The economy of Ireland is a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. In terms of GDP per capita, Ireland is ranked as one of the wealthiest countries in the OECD and the EU-27 at 5th in the OECD-28 rankings as of 2008. In terms of GNP per capita, a better measure of national income, Ireland ranks below the OECD average, despite significant growth in recent years, at 10th in the OECD-28 rankings. GDP (national output) is significantly greater than GNP (national income) due to the repatriation of profits and royalty payments by multinational firms based in Ireland.
A 2005 study by The Economist found Ireland to have the best quality of life in the world. The 1995 to 2007 period of very high economic growth, with a record of posting the highest growth rates in Europe, led many to call the country the Celtic Tiger. Arguably one of the keys to this economic growth was a low corporation tax, currently at 12.5% standard rate.
The Financial Crisis of 2008 affected the Irish economy severely, compounding domestic economic problems related to the collapse of the Irish property bubble. After 24 years of continuous growth at an annual level during 1984–2007, Ireland first experienced a short technical recession from Q2-Q3 2007, followed by a long 2-year recession from Q1 2008 – Q4 2009. In March 2008, Ireland had the highest level of household debt relative to disposable income in the developed world at 190%, causing a further slow down in private consumption, and thus also being one of the reasons for the long lasting recession. The hard economic climate was reported in April 2010, even to have led to a resumed emigration.
After a year with side stepping economic activity in 2010, Irish real GDP rose by 1.4% in 2011. The economic challenges continued, however, with some economists fearing the European sovereign-debt crisis had suddenly caused a new Irish recession starting in Q1 2012, when the Central Statistics Office announced that seasonally adjusted quarterly real GDP had contracted by ?1.1%. The figure was however later revised to ?0.5%, and the recession threat was avoided by a small positive growth in the subsequent two quarters, mainly due to strongly driven improvements from the export sector. In November 2012 the European Commission's economic forecast for Ireland showed positive growth overall in 2012 at 0.4%, followed by increasing growth rates to 1.1% in 2013 and 2.2% in 2014.