(Bloomberg) -- Ireland's economy expanded in 2020 despite the devastation of the pandemic as surging exports countered a slump in domestic demand.
The nation's Gross Domestic Product grew 3.4% in 2020, the central statistics office said Friday, driven largely by the export sector. The domestic economy, however, struggled.
“Today's figures once again point to the dual economic impact of the pandemic, with domestic activities bearing the brunt,” Finance Minister Paschal Donohoe said in an emailed statement. The “remarkable” GDP growth is “entirely a result of the growth in exports.”
Local economists tend not to focus on GDP as a measure of Ireland's economy, given the presence of so many large U.S. companies who use the country as a gateway to the European market. In 2015, for example, overseas multinationals based in Ireland helped GDP to grow 26%, prompting international ridicule.
Modified domestic demand, which strips out the impact of activity which does not impact the economy on the ground, shrank 5.5% in 2020. Household consumption fell 9% last year, Donohoe said. That's double the worst of the global financial crisis in 2009.
“While 2020 was a challenging year for indigenous exports, with food and beverage exports suffering a decline, the pharma and ICT sectors recorded extraordinary export growth, driven by blockbuster immunological drugs, Covid related products, and the shift to home-working,” Donohoe added.
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