Ireland’s economic issues, over the last two years, were brought about by an over-reliance on the construction sector and irresponsible domestic bank lending. However, these problems were quickly addressed and the country has adopted a four-year plan, agreed with the International Monetary Fund (IMF) and the European Union (EU) which will return the exchequer deficit to 3% of GDP by 2015.
A fact that is often ignored is that the country possesses a dual economy and that the issues encountered by Ireland’s economy are centered on the domestic economy while Ireland’s export-led economy remains prosperous. Irish exports are at an all time high. The growth and development of multinationals, with their focus on high value goods and services exports, are fundamental to the Irish economy and an essential component of Ireland’s economic recovery.
There have, in fact, been benefits to Ireland’s FDI community from the domestic economic issues experienced over the last two years. For example, Ireland’s competitiveness has improved significantly.
The country is amongst the cheapest in the EU for energy for medium/large businesses, consumer prices fell 1.7% in 2009 and 1.6% in 2010, wages are forecast to fall by 3% in 2011, prime office rents are falling sharply and house prices are down 35% from their peak in the mid-2000s. Further proof of Ireland’s attractiveness as a location for FDI can be seen in the high rankings the country receives in a number of internationally recognized reports. The recently published National Irish Bank and fDi Intelligence Inward Investment Performance Monitor, ranks Ireland as the 2nd most attractive country globally for Foreign Direct Investment just behind Singapore.
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