- Industrial production in Ireland fell by 31%. On an annual basis this is the largest decline in the European Union
- Mainly the modern sectors, but also the food sectors were losing
- This could mean a slowdown in the European tiger movement, whose economy has doubled in the past decade
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Industrial production in Ireland fell 31 percent in April. every year, and if you exclude mining, power and heating, it comes to 32.2 percent. y / y – according to the data of the local statistics bureau. This is the largest drop in the entire European Union. Slovakia came second from the bottom, with production falling sharply, but “only” by 9.6 percent. xy.
The industry across the European Union also saw a decline, but by only 0.5%. xy. It even increased production in Poland at 15.8% yoy, which gave us fourth place in terms of dynamics behind Lithuania (+20.6% yoy), Denmark and Bulgaria, according to Eurostat data. What happened in Ireland?
There has been a sharp decline in the so-called “modern” sector. Here, the decrease was as much as 34.8 percent. On an annual basis according to seasonally adjusted data, it increased by 19.8 percent. Compared to March this year. The traditional sectors grew 4.6 percent. On an annual basis, it lost 2.9 percent. compared to March.
To be clear, the “modern” sector includes the production of chemicals, pharmaceuticals, computers, electronics, medicine and dentistry. Thanks to these industries, wages in Ireland are among the highest on the Old Continent. The average Irish person earns more than 3,000 euros per month, which is a quarter more than the British and three times more than the average pole. In Europe, the Irish are more than the Swiss, the Danes and the Luxembourgish.
But it is difficult to predict the problems of the Green Island economy at the moment, because a look at the data from a year ago shows one of the reasons for the collapse in April. Well, in April 2021, industry in Ireland grew by as much as 45.1 per cent. rdr, so there was a lot to fall for this year. on the other side Industrial production is only 20%. higher than in 2015, of which 11.6% are higher in recent sectors.
Among the “non-modern” sectors, beer producers complain of declining production and sales. As much as 46 percent. Its production decreased last year. Irish producers complain about the second highest rate of production tax in the EU – 55 cents per liter, which is just under half a liter.
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In April alone, the following sectors saw a significant decline year-over-year: Paper and registered data carrier production (-38.1% year-on-year), and the electrical equipment sector – by 27.9%. On an annual basis, but also food – by 6.9 percent. xy.
Ireland is the European economic tiger
In the past ten years, Ireland has ranked first in economic growth in the European Union five times, including the last two years 2020-2021. Over the past decade, Green Island’s GDP has grown by as much as 110.2 percent.While the European Union averaged 11.6%, the Polish economy grew by 36.3%.
In the first quarter of this year. Real GDP growth was 11%. Ireland was ahead of Portugal only. Where did this rapid promotion of Europe’s richest economies come from?
Google, Apple, Facebook, Microsoft and Amazon, as well as Intel, Dell, AOL, PayPal, eBay, Oracle, Cisco and Twitter are based in Ireland in Europe. Ireland enables these companies to monetize their intellectual property outside the country and not pay taxes on this activity. The situation may change in an instant Introducing a digital tax in the European Union.
“Economic growth in Ireland was largely artificial. It was caused mainly by the attraction of multinational companies with low taxes and did not reflect the actual increase in welfare” – analysts estimate the Polish Economic Institute.
“The Responsible Development Index suggests moderate social welfare in Ireland. It indicates that Ireland improved its score from 23 to 19. (…) If GDP was used as a measure of development, Ireland would rank third in the world – after Singapore and Luxembourg “- commented analysts PIE.
In their view, the EU should try to limit transfers of profits to Ireland. Perhaps this is how the digital tax will work.
“Economic growth built in this way has little effect on the real wealth of society. At the same time, such activities are detrimental to the development of other members of society” – they commented.
Author: Jacek Frączyk, Journalist at Business Insider Polska
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