Oh, wonderful Ireland!
The Emerald Isle, famed for her lush green land, her stunning rugged, dramatic western coast and her beautiful, historic, cities. A country celebrated for her lyrical heart that has been hailed by generations of some of the finest poets, playwrights, novelists, and songwriters.
The home of James Joyce, Samuel Beckett, George Bernard Shaw; of Jonathan Swift, Oscar Wilde and W.B.Yeats. Where musicians of the caliber of U2 and Rory Gallagher honed their craft. The home of Eurovision voices that have repeatedly charmed the audiences of Europe. Where spellbinding actors such as Richard Harris, Cillian Murphy, Liam Neeson and Saoirse Ronan among many others, set out on their careers that have enthralled us with their talents.
This is the storytellers’ country — the land of the Blarney and the Craic, sometimes lubricated by Guinness and a taoscán of smooth, warming whiskey.
It’s the lucky land, and with all this in mind, it seems like Ireland is truly blessed. But that’s not the whole story, because Ireland’s success is also the result of some hard-headed economics. We took a dive into some fascinating data from the World Bank that shows a big indicator of this success, and we considered how it correlates with Ireland’s recent economic performance. Here’s what we found.
GDP, Air Traffic Data, and Economic Performance
The luck of the Irish is illustrated by data that we collated and crunched in our latest GoFigure! report.
Using information from the World Bank database, we examined trends in air transportation and how they correlate with the economic performance of different regions and countries around the world. Economic performance was measured by GDP, and this is where modern Irish economic history and our study intersect. The study looked at both air freight and air passenger traffic from the year 2000 to 2017.
What we found overall was that we could relate the growth of GDP per capita in any given country or region to passenger, freight, and population figures. We discovered that the higher the passenger traffic — relative to population size — and the higher the freight traffic, then the higher the GDP per capita is in each country.
This isn’t to say that there is a direct causal relationship between air traffic rates, and economic performance in GDP per capita. Such a conclusion would be far too simplistic to be reasonable. However, as an indicator of a country’s economic health it’s interesting at the very least and quite instructive, when we unpack the numbers.
That’s when Ireland’s performance came to light. Ireland ranked as the world’s number three in terms of passenger traffic, with 153,537,551 passengers in 2017, outnumbered only by the geographic, demographic, and economic giants of the USA and China, that led the way in passenger numbers and freight volume.
Relative to population size, Ireland ranked first for the number of passengers per native adult (in this study, adults being individuals aged 15 and over.) The ratio was 40.7 passengers for every one Irish adult. This far outstripped the number two country, Iceland (another surprise), which welcomed an average of 26.56 passengers per native adult. Using this calculation, the US and China didn’t make the top 20.
At this point, we looked at the GDP per capita of Ireland and noted that it had grown from an average of US $48,672 in 2010 to US $74,433 in 2017. This was the most significant per capita growth in the Europe and Central Asia region, second only to GDP growth rates in North America.
It wasn’t surprising to see the US and China at the top of the rankings, and the likes of some of the Gulf states and East Asian economies populating the higher reaches of the air traffic charts, especially freight. However, Ireland’s prominence came as something of a surprise. After all, it’s a relatively small country, both geographically and in terms of population, so we did a bit of investigation into Ireland’s recent economic performance and found out why it had performed so well.
Ireland’s Economic Miracle: The Rise, Fall, and Rise Again of the “Celtic Tiger”
Ireland is the “Celtic Tiger” — the economic miracle that began in the 1990s and the early 2000s when the country boomed out of decline, until it was tamed by recession in 2008. However, since this crash, it has been clawing its way back again. And this is where our story emerges.
In 2018 it was reported that Irish economic growth was 7.8 percent, the highest in Europe. The value of the Irish economy is now close to €300 billion, 56 percent higher than at the Celtic Tiger peak of 2007. Employment grew at a faster-than-expected 3 percent and was close to its pre-crash peak. Retail sales, perhaps the strongest indicator of consumer confidence, grew by 6 percent. And, since 2013, Irish GDP has grown by 50 percent, placing Ireland ahead of China in global growth terms.
Ireland’s turnaround came about thanks to a variety of factors including a harsh austerity plan that was implemented in 2008. More positively, however, is the fact that Ireland benefited from the arrival of a large number of foreign companies that chose it as a location for European expansion, thanks in part to low corporate tax rates. Foreign direct investment never stopped, even during the dark recessionary days, and the rate of this investment didn’t decline. In fact, Ireland has consistently been the best country in the world for attracting high-value foreign direct investment.
Huge companies including Facebook, Apple, Airbnb, Google, Microsoft, and medical device maker Medtronic all flocked to Ireland and now have a massive presence there. In fact, eight of the ten largest companies in the country are foreign-owned, and US multinationals directly employ a quarter of Ireland’s private sector labor force, according to the OECD.
These economic and commercial factors, combined with Ireland’s natural beauty, its history, and its culture, plus its ideal location midway between Europe and North America, means it has become a “go-to” destination. And it’s perhaps less surprising than it first appears that there’s a rising number of people knocking down the country’s doors to visit, both for business and pleasure.
Our GoFigure! report is a great illustration of how Ireland has ridden the waves of economic uncertainty and emerged successfully. So, let’s celebrate this success, raise a glass of whiskey or a pint of the famous black stuff, and say “Sláinte” to our friends, the Irish!