DUBLIN: The Irish economy grew 4.8% in 2014, the fastest pace in Europe, in a sign the country has emerged from its troubled financial chapter since becoming the first eurozone country to exit a bailout program in late 2013.
The government figures show Ireland’s economic growth picked up considerably from a 0.2% growth rate in 2013, when it exited a rescue program provided by the European Union and International Monetary Fund after initiating steep budget cuts and other austerity measures.
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Ireland’s performance was better than the U.K., which grew 2.6% in 2014, and marks a contrast to the eurozone’s tepid recovery as a whole. The combined economy of the 19-member currency bloc, which includes Ireland and recently expanded to include Lithuania, gained just 0.8%. Not all eurozone countries have reported figures for 2014 yet, but none is expected to surpass Ireland’s 2014 growth, according to the EU’s most recent forecasts.
Behind Ireland’s faster growth is its heavy economic dependence on the U.K. and the U.S., where it exports much of its goods. Ireland’s economic performance mirrored that of its No. 1 market, Britain, with faster growth in the first half of 2014 followed by a slowdown in the second. That reliance, though, has raised concerns about the underlying strength of the Irish recovery.
There is a very powerful link between the fate of Ireland and that of the U.K. and the U.S.,” said David Byrne, an economist at the Irish Economic and Social Research Institute, a Dublin-based think tank. The performance of the U.S. e UK to economy is also critical for Ireland, since it helps drive the business decisions of American technology giants such as Google Inc. and Twitter Inc., which have established regional headquarters in Ireland to profit from its lower corporate-tax rates.
But there are signs Ireland’s domestic economy is also gathering steam, as evidenced by increased business confidence and consumer spending.
