Irish GDP soars by almost 10% following surge in exports ahead of US tariffs

Irish Examiner

2 days ago

Irish gross domestic product (GDP) grew by almost 10% in the first three months of 2025, significantly outpacing preliminary forecasts of just over 3%.
The figures released by the Central Statistics Office (CSO) on Thursday show that the rise in exports in response to US President Donald Trump's 'Liberation Day' tariffs underpinned the 9.7% rise in GDP.
Total exports expanded by 9.4% in the first three months of 2025, equating to more than €18bn, with goods exports increasing by by almost 15%.
Stockpiling
The end of the first quarter saw Irish-based companies across pharma, food, medtech, machinery and beyond export goods to the US at a rapid rate as part of efforts to reduce their exposure to a series of punitive tariff measures on goods entering the country.
In March alone, Irish exports to the US rose from €5.1bn to €25.4bn, up almost 400% on an annual basis.
"Overall, GDP is estimated to have grown by 9.7% in the quarter, driven significantly by a rise of 9.4% in exports that outpaced the increase in Imports of 8.0%," said CSO statistician Gordon Cavanagh.
Meanwhile, gross national product (GNP), a measure of economic activity that excludes the profits of multinationals, decreased by 2.1% in the quarter, reflecting a significant increase in factor income outflows which rose by 36.1%, Mr Cavanagh said.
Multinational-dominated sectors grew by 12.4% between January and March, with domestic sectors increasing by just 0.7%.
Domestic demand
Meanwhile, modified domestic demand (MDD), a broad measure of underlying domestic activity that covers personal, government, and investment spending while excluding exports, grew by 0.8% in the three months.
Personal spending on goods and services, a key measure of domestic economic activity, grew by just 0.6% in the same period, the CSO found.
"GDP is estimated to have grown by 9.7% in January, February, and March 2025, driven by significant growth in exports of goods," said CSO assistant director general with responsibility for national accounts and price statistics, Chris Sibley.
The globalised industry sector expanded by 17.1% between January and March compared with the same period in 2024, Mr Sibley added, while the information and communication sector posted an increase of 3.8% over the same period.
The statistician added that growth in the domestic economy was largely underpinned by personal spending as well as a 0.9% wage growth.
The balance of payments current account recorded a surplus of €6.6bn in transactions with the rest of the world in the first three months of 2025, the CSO said.
While Irish GDP continues to rise, uncertainty remains with Mr Trump's 90-day tariff pause set to end soon, threatening a tougher global trade environment which could stifle growth.
'Heightened uncertainty'
Earlier this week, the Organisation for Economics Co-operation and Development (OECD) warned that heightened uncertainty over tariffs will encourage Irish households to save more despite rising wages.
In its economic outlook, the OECD said higher tariffs or non-tariff trade barriers would lower Irish growth and exacerbate medium-term fiscal challenges, urging Ireland to prioritise productivity-enhancing reforms, spending efficiency, and stricter domestic fiscal controls.
Talks continue between the European Union (EU) and the US after Mr Trump called the 27-nation bloc "very difficult to deal with," with the EU's trade negotiator, Maros Sefcovic, and US Trade Representative Jamieson Greer said their meeting in Paris was constructive.
"We both concluded that we are advancing in the right direction, at pace," Sefcovic told reporters. Technical talks were ongoing in Washington, he said, and high-level contacts will follow.
"What makes me optimistic is I see the progress... the discussions are now very concrete," Mr Sefcovic said.