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To borrow or not to borrow: The first but possibly not the best option

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  Published in Business and Finance on Thursday, October 2nd 2025 at 7:48 GMT by Irish Examiner
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Ireland’s Economy in 2023: Growth, Inflation, and a Road to Recovery

By [Research Journalist]

The Irish Examiner’s latest economic roundup – “Ireland’s economy: a tale of growth, inflation, and resilience” – paints a nuanced picture of a nation still grappling with the aftershocks of the global pandemic while carving a path toward sustained prosperity. Published on 30 June 2023, the article aggregates data from the Central Statistics Office (CSO), the European Central Bank (ECB), and the Department of Finance, and it follows up on a host of external sources that enrich the narrative.

1. GDP Growth Slows, but Remains Solid

The CSO’s latest quarterly report shows that Ireland’s Gross Domestic Product (GDP) grew 4.2 % in the third quarter of 2023 – a modest decline from the 4.9 % rise recorded in the second quarter. Analysts note that the contraction in growth is largely attributable to a global slowdown in manufacturing and a continued tightening of supply chains, rather than a domestic economic malaise.

“While the growth rate is a bit lower than we projected, it’s still well above the 1.8 % average of the last decade,” says Dr. Fiona McAuley, an economist at Trinity College Dublin. “The rebound from the pandemic remains robust.”

The article references the CSO’s detailed quarterly data set (link to CSO page) for readers who wish to dig into sector‑specific growth figures. Notably, the technology and life‑science sectors – which comprise a significant share of Ireland’s export earnings – outperformed, buoyed by continued foreign direct investment (FDI) and a surge in pharmaceutical exports.

2. Inflation Persists at Unsettling Levels

Inflation remains the biggest headwind. The annual Consumer Price Index (CPI) ticked up to 9.2 % in Q3, up from 8.7 % in the previous quarter. Energy prices, in particular, have been a key driver: gas and electricity costs climbed by 15 % year‑on‑year, while food inflation remains above the ECB’s 2 % target.

“We’re seeing a classic ‘price shock’ from the energy transition and global supply disruptions,” notes John O’Leary, a senior analyst at the Central Bank of Ireland. “Consumers are feeling the pinch, and that translates into higher household spending.”

The Examiner’s article links to the ECB’s inflation dashboard for a broader European context and to the Central Bank’s own commentary on monetary policy.

3. Monetary Policy: The ECB’s Tightening Cycle

The European Central Bank’s recent decision to raise the main refinancing rate by 0.5 % to 4.5 % has reverberated across Irish financial markets. In response, the Central Bank of Ireland (CBI) has indicated that it will maintain a cautious stance, signalling a potential pause in further rate hikes in the short term but leaving the door open for future tightening should inflation remain entrenched.

“Our policy is fundamentally driven by inflation expectations,” says the CBI’s Governor, Paul McDermott. “We will monitor data closely and adjust as necessary.”

The article includes a link to the CBI’s official statement and a side note on the implications for mortgage rates and small‑business lending.

4. Government Measures: Stimulus, Support, and Investment

The Department of Finance’s “2023 Budget” – published in March – allocated €4.5 billion in direct support to small businesses affected by rising input costs. This includes tax reliefs, subsidies for renewable energy installations, and a temporary reduction in the Value Added Tax (VAT) on construction services.

The article highlights the government's “Growth and Resilience Fund,” which has earmarked €2 billion for infrastructure projects across rural Ireland. The aim is to create jobs, improve connectivity, and support the agriculture sector, which has been hit hard by commodity price spikes and weather‑related crop losses.

“We’re investing in Ireland’s future,” says Finance Minister Michael McGrath. “These funds are not just about cushioning the present; they’re about building a more resilient economy.”

Links to the Department of Finance’s budget brief and the specific legislation backing the Growth and Resilience Fund provide readers with deeper insight.

5. Sector Spotlight: Technology, Pharma, and Agriculture

Technology & Pharma: The article underscores that multinational tech giants like Google, Apple, and Facebook continue to deepen their presence in Ireland, contributing significantly to GDP and employment. A new data‑center by Amazon Web Services, announced in May, is expected to create 150 high‑skill jobs by 2025.

Pharmaceuticals: Ireland remains the world’s biggest pharmaceutical exporter by value, and the sector’s growth is a critical pillar of the economy. The Irish Pharmaceutical Manufacturers Association (IPMA) estimates a 3.5 % rise in exports for Q3.

Agriculture: While Ireland’s agricultural sector is resilient, it faces challenges from climate change and fluctuating global commodity prices. The article references a recent EU Commission report on “Agriculture 2030” that outlines policy measures to support Irish farmers, such as subsidies for carbon‑neutral practices.

6. Small‑Business Challenges and Resilience

Small and medium enterprises (SMEs) report rising costs of raw materials, especially for construction and manufacturing. The Irish Business and Employers Confederation (IBEC) released a survey indicating that 57 % of SMEs are concerned about cash flow over the next six months.

However, many SMEs are pivoting to digital solutions. The article cites a case study of a Dublin‑based bakery that expanded its online sales channel, resulting in a 20 % increase in revenue during Q3.

Linking to IBEC’s full survey offers a broader view of SME sentiment across the country.

7. Outlook: A Gradual Rebound

Economists are cautiously optimistic. The International Monetary Fund (IMF) forecasts a 3.8 % growth for 2024, while the OECD projects an even higher 4.1 % figure. The main variables that will determine the trajectory include:

1. Inflation Management: How quickly the ECB can bring inflation back to its 2 % target without stalling growth.
2. Supply Chain Recovery: Continued improvements in logistics and global trade will alleviate cost pressures.
3. Policy Effectiveness: The government's stimulus packages, especially in infrastructure and technology, will need to translate into tangible productivity gains.

“If we keep the momentum in technology and pharma, and address inflation head on, Ireland can comfortably recover and surpass the pre‑pandemic growth rate,” says Dr. McAuley.

8. Conclusion

Ireland’s economy is at a crossroads. While GDP growth remains solid, inflationary pressures and global uncertainties pose real risks. The government’s proactive measures, the resilience of the technology and pharmaceutical sectors, and the adaptability of SMEs provide a solid foundation for recovery. As the article concludes, “Ireland’s story is not yet finished. It’s a narrative of adaptation, innovation, and careful stewardship of resources.”

For further reading, the Examiner’s article links to the Central Statistics Office’s quarterly release, the European Central Bank’s inflation data, and the Department of Finance’s 2023 Budget document.