The 'Celtic Tiger' roars again

Ireland's growth rates resemble its glory days a decade a go.

In 2010, Ireland almost went bust. Now its growth rates are back at levels reminiscent of the days of the Celtic Tiger' in the 2000s. GDP rose by 1.5% in the second quarter of 2014, or 6.5% year-on-year.

"Pretty much everything is heading in the right direction," as Philip O'Sullivan of Investec Ireland points out. Exports, crucial to Ireland's GDP, rose by 10% in the first half, while investment is now growing by 15% a year.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Even consumers, shattered by the collapse of the credit bubble, managed to increase spending by an annual 1.3% between April and June.

It helps that Ireland's two top trading partners, the US and the UK, are expanding at a healthy clip, while the euro has weakened and southern European borrowing costs have fallen as the threat of a euro break-up has receded.

Advertisement
Advertisement - Article continues below

But it's not just down to "the luck of the Irish", says the FT. Ireland has "taken the toughest of choices".

Large wage cuts in both the public and private sectors have restored competitiveness. The government also forced the banks to come clean about their losses, paving the way for a recovery in lending.

With public debt still at a "dangerous" 120% of GDP and a huge private debt burden, Ireland isn't out of the woods. But it is certainly peripheralEurope's poster child.

Advertisement

Recommended

Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/investments/bonds/government-bonds/600738/keep-an-eye-on-swedens-interest-rates
Government bonds

Keep an eye on Sweden's interest rates

Could Sweden be poised to return to negative interest rates?
31 Jan 2020
Visit/economy/uk-economy/brexit/600739/boris-johnsons-big-brexit-plan
Brexit

Boris Johnson’s big Brexit plan

The prime minister needs to get Brexit done, and get the economy growing – particularly for first-time Tory voters. Can he manage all that while negot…
30 Jan 2020
Visit/520380/investors-neednt-fear-the-rise-of-europes-green-parties
EU Economy

Investors needn’t fear the rise of Europe’s green parties

Green parties across Europe are finding the centre-right to be natural allies. That will be great for business, says Matthew Lynn.
12 Jan 2020

Most Popular

Visit/investments/commodities/silver-other-precious-metals/600812/buy-silver
Silver and other precious metals

You should all own some silver. Just don’t expect it to make you rich

Silver is cool, beautiful and immensely useful. But for investors it's the most frustrating of metals. Dominic Frisby explains why you should own some…
12 Feb 2020
Visit/economy/600802/money-minute-wednesday-12-february-grim-times-for-european-industry
Economy

Money Minute Wednesday 12 February: grim times for European industry

Today's Money Minute previews industrial production in the eurozone, plus the latest from America's central bank.
12 Feb 2020
Visit/investments/investment-strategy/600804/the-secret-to-avoiding-being-panicked-out-of-your-portfolio
Investment strategy

The secret to avoiding being panicked out of your portfolio

With the coronavirus continuing to occupy headlines, investors still aren’t sure how to react. But the one thing you mustn’t do is panic. Tim Price ex…
11 Feb 2020
Visit/517625/tr-european-growth-trust-why-investors-shouldnt-overlook-europe
Sponsored

Why investors shouldn’t overlook Europe

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, tackles investor questions around Europe’s economic outlook and the conseq…
6 Nov 2019