Due to the significant impact of Ireland’s large multinational sector on gross domestic product (GDP), officials prefer to focus on modified domestic demand (MDD) to assess the economy’s strength.


Annually, domestic demand increased by 1.1% in the first quarter, the highest growth since the same period last year, as reported by the Central Statistics Office.


The government projects that domestic demand will grow by 1.9% for the entire year of 2024 and by 2.3% in 2025, following a modest 0.5% increase last year.


“As the year progresses, the increase in real incomes should further support growth in our domestic economy,” stated Minister for Finance Michael McGrath, welcoming the data.


GDP, the measure used to calculate Ireland’s share of activity across the eurozone, grew by 0.9% in the first quarter compared to the last three months of 2023.


However, GDP contracted by 6.5% in the first quarter compared to the same period last year, significantly weaker than the preliminary forecast of a 1.1% contraction. McGrath attributed this to “the volatility of production in the multinational sectors.”


The government forecasts GDP growth of 2.6% this year and 3.9% in 2025 after a 3.2% contraction last year.