Ireland: Q3 GDP jumps 5.5 percent

The Irish economy posted a sharp rise in the third quarter, defying the headwinds of recent inflation shocks.

Provisional data from the Central Statistics Office shows gross domestic product increased by 5.5 percent between July and September compared to the previous quarter.

The CSO attributed this growth primarily to expansions in industry and information and communication sectors, which are heavily dominated by multinational corporations. AIB’s latest bulletin suggests the underlying domestic growth is lower, projecting a 3.8 percent increase for the year using modified gross national income. The bank noted that spending related to artificial intelligence, specifically the fit-out of data centers, is a major fuel for the current expansion.

AIB also warned that inflation is likely to peak in the 4 to 5 percent range. This growth is not evenly felt across the population, as the GDP metric is often criticized for not accurately reflecting domestic activity due to contract manufacturing and other multinational-led financial flows.

Household finances show a different trend. The Central Bank reported that the net financial wealth of Irish households rose by €31.8 billion in the second quarter, reaching a total of €473 billion. Positive revaluations, likely driven by market gains, accounted for €29.8 billion of that increase.

When property and land assets are included, total household wealth stands at €1.4 trillion. This equates to approximately €268,000 per person. Property values continue to drive the majority of this wealth, accounting for more than two-thirds of the total.

At the national level, Ireland remained a net lender to the rest of the world. Net investment in financial assets exceeded the net incurrence of financial liabilities by €67.9 billion. Government financial assets stood at €156.1 billion, while liabilities totaled €234 billion, leaving the government with a net financial position of negative €77.9 billion at the end of the quarter.