Ireland is one of the most competitive countries in the euro area despite high taxes

Ireland’s ranking in the infrastructure area deteriorated from 20th place in 2021 to 23rd in 2022. Photo credit should read: Brian Lawless/PA Wire

Ireland is the third most competitive country in the euro area, a new report has found.

The survey also found that Ireland is the 11th most competitive economy in the world, out of 63 economies, an improvement from 13th position last year.

“We cannot be complacent and staying competitive must remain a constant focus for government and enterprises alike,” said Dr Frances Ruane, chair of the National Competitiveness and Productivity Council (NCPC).

“Urgently improving the key foundations of Ireland’s competitiveness performance is a vital response to challenges such as cost pressures, trade disruption, supply chain issues and infrastructural deficits,” she added.

The 2022 IMD World Competitiveness Rankings assesses and ranks 63 economies around the world based on their ability to create and maintain a competitive business environment. The rankings are based on more than 330 indicators across economic performance, government efficiency, business efficiency, and infrastructure.

Ireland has improved its ranking from 2021 in two of these areas, according to the IMD. Ireland went from 22nd place to 7th place in economic performance, and from 13th place to 11th place in government efficiency. However, Ireland’s ranking in the infrastructure area deteriorated from 20th place in 2021 to 23rd in 2022.

“Improving competitiveness and increasing productivity are essential to ensuring businesses in Ireland can compete successfully in international markets and protect the resilience of the Irish economy throughout the economic cycle,” said Dr Ruane.

Yet, the President of the Irish Tax Institute Karen Frawley said earlier this month that Ireland has been put at a competitive disadvantage due to the country’s comparatively high income tax rates at average salaries and above.

"Irish workers earning over €48,000 a year pay more income tax than workers in competitor countries, such as the UK, Switzerland and, the US," she said.