In 2010, Ireland almost went bust after the state was forced to prop up a bankrupt banking sector. Now two years after exiting an IMF and EU bailout package, it has become the Eurozone’s star performer. Along with a rejuvenated Spain, Ireland has outstripped all other members of the Eurozone. GDP is predicted to grow by 6% this year and 4.3% in 2016. This growth has allowed Ireland to reduce its debt burden from a peak of 125% of GDP to 108% now.
Enda Kenny’s latest budget is aimed at keeping the recovery going. The budget contained measures including a cut in corporation tax from 12.5% to 6.25%. To qualify for this 50% cut, companies must demonstrate that their earnings are dependent upon intellectual property created in Ireland.
Interestingly bottlenecks are already developing in the Irish economy. For example, the demand for housing is outstripping supply particularly in Dublin. It will soon become clear whether Ireland is overheating. After only a few years since near bankruptcy, this is not such a bad problem to have.