Headline growth in the Irish economy has been revised up to 0.2 per cent for the second quarter. The Central Statistics Office (CSO) had previously estimated that the economy shrank by 1 per cent in gross domestic product (GDP) terms between April and June.
However, the agency on Thursday published an updated GDP estimate, based on both expenditure and output data, suggesting the economy’s growth trajectory remained positive in the second quarter.
While the Department of Finance has cautioned against using GDP as a gauge of economic growth here because it is distorted by foreign multinationals, it is still used to calculate the Republic of Ireland’s share of activity across the euro zone.
GDP increased by 7.4 per cent in the first quarter and by 20 per cent year-on-year amid a surge in pharmaceutical exports to the US in advance of threatened tariffs.
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The latest figures show modified domestic demand (MDD) grew by 0.6 per cent in the second quarter. MDD is a broad measure of underlying domestic activity that covers personal, government and investment spending.
Personal spending on goods and services, a key measure of domestic economic activity, grew by 1 per cent, the agency said.
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Private consumption accounts for about two-thirds of national income and is typically the main driver of economic growth.
The CSO said the globalised industry sector expanded by 2.5 per cent in the second quarter while the information and communication sector posted an increase of 1.8 per cent over the same period. Overall, the multinational-dominated sector rose by 1.1 per cent in the quarter.
“I note that GDP remained elevated in the second quarter driven by significant production in the multinational sector,” said Minister for Finance Pascal Donohoe.
“The elevated level of activity in the first half of the year is attributable, in part, to the front-loading of exports to the US in advance of tariffs. This is expected to moderate over the coming quarters.
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“Of course, GDP is not an accurate reflection of living standards in Ireland. Indeed, my preferred metric – modified domestic demand – presents a better approximation of domestic activity. On this basis, the domestic economy grew by 0.6 per cent relative to the previous quarter and is up around 3¾ per cent in the first half of the year on an annual basis.
“This is consistent with the strength of the labour market where the number in employment reached an all-time high of over 2.8 million in the second quarter."
EY Ireland chief economist Loretta O’Sullivan said: “The rush by businesses to get in [in] advance of US policy shifts is evident in the figures published by the CSO.
“Tariff front-running by the pharmaceutical sector in particular buoyed exports and GDP in the first quarter of 2025, but this activity moderated somewhat in the second quarter."
Janette Maxwell, tax partner with Grant Thornton, said: “Ireland continued to demonstrate strong international trade performance in the second quarter of 2025, with notable surpluses in both goods and services.
“Exports of goods reached €95 billion, significantly outpacing imports of €36 billion, resulting in a robust trade surplus of €58.4 billion. This reflects Ireland’s continued strength in high-value sectors such as pharmaceuticals, technology, and agri-food."
