CSO revises contraction in GDP to 7% during first quarter

Total exports during the first three months of the year fell by €18.8bn while imports increased by €4bn.

The fall in Ireland’s gross domestic product (GDP) during the first three months of the year was not as severe as first estimated with the Central Statistics Office (CSO) revising the contraction down to 7%.

Early last month, the CSO said that GDP fell by 12.1% between January and March largely driven by a contraction in the pharmaceutical-heavy industry sector. In advance of tariffs being imposed in April last year, numerous pharmaceutical firms frontloaded their exports from Ireland to the US which led to a surge in the export figures and GDP levels which is now unwinding. 

The decline was initially so severe that it dragged down the entire eurozone economy with Eurostat saying the bloc’s GDP for the first quarter declined by 0.2% compared to an earlier estimate of 0.1% growth. However, the CSO has now released the final accounts for the first quarter which shows that GDP contracted only 7%.

Senior statistician with the CSO Kieran Culhane said the GDP revisions come following updates to 2025 annual results “which will have a base effect” that affects quarter one of this year.

“We also use a new base year for constant price data, so changing the base year from 2023 to 2024 will change the weighting, which has an impact on the constant time series. Then we also review our annual season adjustment,” he said, adding that they also have had an additional 30 days to pull in data and to better understand the full picture “to make sure we have the most accurate possible result”.

Ireland’s GDP can be very volatile as it is heavily influenced by the number of multinational corporations with operations here. As a result other measures, such as modified gross national income (GNI*) or modified domestic demand (MDD), are preferred measures of Ireland’s economy.

According to the revisions, during the first quarter of this year, multinational-dominated sectors contracted by 7.5% with the pharmaceutical-heavy industry sector seeing a 12% drop and the information and communication sector dropping 2%.

Overall, the domestically focused sectors expanded by 0.1%. The professional, administrative and support sector grew by 1% while the Real Estate Activities sector was largely flat. All other sectors posted contractions including arts and entertainment down 6.2% while construction down 4.3%.

Total exports fell by €18.8bn during this period while imports increased by €4bn. MDD grew by 0.3% during the three months. Personal spending on goods and services grew marginally by 0.8% in Q1 2026.

The CSO also published the annual results for 2025 which showed that GDP grew by 8% last year largely driven by a 14.5% growth in multinational-dominated sectors. The domestic sectors increased by 2.2% in comparison.

Assistant director general at the CSO Chris Sibley said the industry sector “rose by 11.9% compared with 2024 while the information and communication sector increased by 14.8% in 2025”. “Overall, the multinational sector expanded by 14.5% in 2025 and accounted for 50.4% of total value added in the economy.” 

Mr Sibley added that there were “higher levels of economic activity across most sectors focused on the domestic market in 2025” including the construction sector which expanded by 7.2%, real estate activities which increased by 4.9%, and agriculture, forestry and fishing which grew by 3.6%.

GNI* expanded by 4.7% in 2025 while MDD rose by 4.7% in 2025.