Ireland’s (Especially Dublin and Cork) GDP has been growing at an impressive rate for many years, with numerous jobs to match. While many economies are shrinking, the GDP of Ireland has been able to grow at double-digit rates. However, it’s important to remember that this wealth is only on paper. In reality, the Irish aren’t as wealthy as their GDP per capita might suggest. First, let’s talk a bit about Ireland’s GDP growth. For many years, the country has been a leader in the EU in this regard. For example, in 2020-21, Ireland’s GDP grew by a staggering 20.6%. The second place, Estonia, achieved a result three times lower. Additionally, many EU countries saw a decline in GDP during those years. The data, excluding Ireland, is shown in the graph below.

Real GDP Change in 2020-21 Among EU Countries
But these years weren’t an exception. Over the last decade, the GDP of the Emerald Isle has more than doubled. Why is Ireland often left out of our rankings? Economists have long believed that the country’s GDP growth doesn’t translate to an increase in wealth for the Irish people. It doesn’t reflect what’s actually happening in the economy. So, what’s the reason for this?. International corporations like Apple, Google, Facebook, Microsoft, Amazon, Twitter, PayPal, Intel, and Dell have their European headquarters here. The intellectual property that these companies profit from boosts Ireland’s GDP. Essentially, profits from all over Europe are transferred to Ireland, where they’re taxed less. This effectively means Ireland is siphoning off taxes that should be paid in other countries.

Are the Irish Really That Wealthy?
Of course, this doesn’t mean Ireland doesn’t benefit. Even though companies pay lower taxes, the country’s budget still earns billions of euros. But GDP doesn’t translate into well-being. Take, for example, consumption per capita. Ireland doesn’t fare well here, even compared to countries with lower GDP per capita. Consumption in Ireland is only 90% of the EU average. Simply put, it’s lower than that of an average EU resident. Italy and Lithuania, for instance, both have higher consumption levels. Interestingly, Poland isn’t far off this level, with consumption at 84% of the EU average, comparable to that of the Czech Republic, Romania, or Spain.