The Republic occupies approximately four-fifths of the island of Ireland and is bounded on the northeast by Northern Ireland, a part of the United Kingdom. By the Republic of Ireland Act, which came into operation on April 18, 1949, Ireland was declared an independent State. The Republic of Ireland is a member State of the European Union (EU).

The Irish economy outperformed all other European economies in the 1990’s recording GDP growth rates of 9.2% in the period 1995 to 1998. Growth rate of the economy throughout the 90’s was three times the EU average. Growth rates in the 2000 to 2005 period settled down to a more modest but sustainable rate, averaging 5.2% annual average GDP growth for the period. The GDP calculated on current market prices lay at 8.8% for the second quarter of 2007.

Economic growth was driven by rapid expansion of exports of goods and services throughout the 90’s. Exports of goods and services totaling euro 39.2 billion in 1995, have increased to euro 130.3 billion in 2005 and 139.7 billion in 2006. Domestic demand also drove the economy as private consumption and housing construction was boosted by gains in disposable incomes.

In recent decades, the Irish economy has been transformed through a focused approach to foreign direct investment in high technology industries and sustained by tax incentives and a well-educated workforce. In the process, the economy has moved from being primarily an agrarian one to a manufacturing and service trading one. In 2006 the services sector accounted for 71% of employment, industry 24.7% and agriculture 5%.

The COVID-19 pandemic had a significant impact on the Irish economy. However, gross domestic product increased by 9.4% in 2022, largely attributed to strong expansion in sectors dominated by multinational organizations, which grew by 15.6%, while other sectors saw an increase of 5.6%. GDP is expected to decline slightly in 2023, but is forecast to pick up in 2024 and 2025.