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Ireland's strange miracle

Ireland’s strange miracle

a Ireland is seen as a “strange miracle”, as The EconomistThe country will close in 2021 with 20% more wealth than it was before the Covid-19 pandemic. The country’s economy triples the average growth in the eurozone.

In the latest economic forecasts, Released last week, the European Commission said that Growth in the country is expected to hover around 14.6% in 2021, more than double what was previously forecast (which the interim summer forecast was 7.2% this year), the biggest rise in the eurozone.

“Irish GDP is expected to grow very strongly this year, driven by Activities of multinational companies Supported by an internal recovery,” the Community Executive noted in the Fall Macroeconomic Outlook.

For 2022, the Irish economy is still expected to grow by 5.1% (as in the interim forecast in summer). In 2023, Irish GDP is expected to increase by 4.1%.

Moreover, Ireland’s public debt is also expected to decline further in the coming years: the debt-to-GDP ratio is expected to reach just over 50% in 2023, according to the Spanish newspaper.

What is happening with the country’s economic indicators? According to elEconomista, when analyzing GDP on the revenue side, total operating surplus and mixed revenue account for 67.4% (compared to 40% in the eurozone). Salaries represent only 27% of GDP (compared to 50% in the Eurozone).

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The rest, as the same newspaper explains, is production taxes. In other words, Ireland’s GDP consists mainly of commercial profits, which do not “penetrate” directly into the country’s resident population. Reason? Most companies that have established themselves in Ireland are subsidiaries and multinationals, sharing a large portion of the profits obtained in the country in the form of dividends – taking advantage of the advantages of double taxation.

In practical terms, corporate profits represent Ireland’s GDP, and its inflation, but it does not affect Irish disposable income in the same way, as the Spanish newspaper explains.

curious, The Irish government presented on Tuesday, a series of measures to combat the spread of new cases of Covid-19, which requires the closure of bars, clubs and restaurants at midnight from Thursday.

In Ireland, hotels and restaurants resumed their usual hours on October 22, after complying with the 11:30 pm closure obligation since January, but the development of the new Corona virus epidemic is once again becoming “worrisome”, Irish Prime Minister Michael Martin said.

Read also: Commission improves to 6.5% French GDP growth this year

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