'Solid pace' growth of Irish domestic economy offset small decline seen by multinationals 

Finance minister Paschal Donohoe said the latest national accounts, alongside the Exchequer returns published on Wednesday, 'illustrate the relatively healthy aggregate position of the domestic economy'.

Growth across a number of domestic sectors during 2024 offset a slight decline seen in multinational dominated industries, particularly pharmaceuticals, with the overall Irish economy growing by a healthy 2.7%, new data from the Central Statistics Office (CSO) shows.

This marks the second consecutive year of contraction across the multinational sector but last year’s decline was not as severe as 2023.

According to the latest National Accounts from the CSO, modified domestic demand (MDD), which is the preferred measure of the domestic economy as it excludes the activity of large multinationals as well as aircraft leasing firms, grew by 2.7% during 2024 despite a contraction of 1.1% during the period October to December.

Chris Sibley, assistant director general at the CSO, said the increase in MDD was reflected in a 2.3% increase in personal spending and a 2.9% growth in real wages with most sectors showing increases — the highest seen in the professional and administrative services sector, up 5.8%.

Personal consumption accounts for 51% of MDD.

Compared with 2023, capital investment was down by 25.4% to €84.5bn while Government spending on goods and services rose by 4.3% to €53bn.

Finance minister Paschal Donohoe said despite the contraction at the end of last year, “the domestic economy grew at a solid pace”. 

Mr Donohoe said these accounts, alongside the Exchequer returns published on Wednesday, “illustrate the relatively healthy aggregate position of the domestic economy”.

“The external outlook, however, has become increasingly uncertain in recent months against a backdrop of increasing global fragmentation,” he said, adding the Government is aiming to improve resilience in the Irish economy and build buffers in case challenges materialise.

GDP

Irish gross domestic product (GDP) grew by 1.2% during 2024 driven by an 11.7% increase in exports which outstripped a 6.5% increase in imports. A significant portion of Irish exports are pharmaceuticals.

Overall, the domestic sectors grew by 2.1% during the year while the multinational dominated sectors contracted by 0.9%. This is the second successive year of a contraction being recorded in the multinational sector, although it is a significantly smaller decline than the 16.2% that took place in 2023.

However, while modest GDP growth was recorded last year, it is not the preferred measure of the Irish economy as it is heavily weighted towards the activities of the numerous multinational companies that have operations here.

Kieran Culhane, statistician with the CSO, said the information and communication sector — which encompasses tech companies as well as the industry sector — which includes the pharmaceutical companies — have a “disproportionate impact on the results”.

Overall, the multinational sectors accounted for 45.9% of total value added in the economy in 2024. Total GDP for the year stood at just under €500bn.

“Information and communication had strong growth in the year of 8.4% but that was offset by a 5.1% decrease in industry,” he said. The industry sector includes pharmaceutical companies.

Mr Culhane said that most of the domestic sectors saw growth during 2024 with the exception of decreases in finance, construction, as well as arts and entertainment.

The largest growth increases were seen in the professional admin and support services sector grew by 5.6% and the public administration, education, and health sector which grew by 2.9%. The financial and insurance sector contracted by 8.5% during the year while constriction declined by 1.8%.