Multinational reliance sees Ireland's GDP climb 130% above EU average

New figures confirm that large multinationals have once again helped drive a huge expansion of the Irish economy in 2022

Ireland was second to Luxembourg which exceeded the EU average GDP by 161%. Pic: Larry Cummins

Ireland's reliance on large multinational intellectual property has resulted in GDP for 2022 exceeding the EU average by over 130%.

Preliminary figures released by statistics agency, Eurostat reported Ireland as having the second-highest GDP in the EU last year, which, along with Luxembourg has far outpaced all other EU countries.

"The high level of GDP per capita in Ireland can be partly explained by the presence of large multinational companies holding intellectual property," according to Eurostat findings. 

"The associated contract manufacturing with these assets contributes to GDP, while a large part of the income earned from this production is returned to the companies’ ultimate owners abroad."

Figures from the Central Statistics Office confirm that large multinational companies once again helped drive a huge expansion of the Irish economy by 12% in 2022.

Multinationals including Apple, Facebook, Pfizer, and Google, among others alone accounted for almost 56% of the so-called total value added to the economy, up from 53% in 2021, the CSO said. Sectors dominated by multinationals, including information and communications, expanded greatly.

However, the CSO found that an alternative measure of economic activity known as Modified Domestic Demand, or MDD, which more accurately reflects the activities for Irish households and businesses in the domestic economy, contracted a second time in Q4 of 2022 by 1.3%. 

With MDD falling by 1.1% in Q3, its consecutive decline fulfilled the criteria for a technical recession.

Ireland's GDP growth was second to Luxembourg which exceeded the EU average GDP by 161%. However, Eurostat also cautioned that the country's above-average results were partly derived from foreign residents who may work in Luxembourg and contribute to its GDP without being part of the country's resident population.

Overall, Sweden, Germany, Finland, Malta and France all reported GDP figures above the EU average. In contrast, Bulgaria reported the lowest annual GDP, 41% below the EU average, followed by Slovakia and Greece at -33% and -32% respectively.

Additionally, the GDP per capita of Poland, Hungary, Portugal, Romania, Latvia and Croatia was less than 30% lower than the EU average.