BY JOHN ELLIS, FINANCIAL ADVISOR
Every year The Economist magazine ranks countries by wealth. This year Ireland was not included. Why? Our numbers are “polluted by tax tricks,” they said. Big companies like Apple and Google funnel profits through Ireland using legal tax strategies, making our economy look richer than it is.
On paper, Ireland’s Gross Domestic Product (GDP) per person was €88,600 in 2024 putting us second in the EU behind Luxembourg and third in the world. That’s more than double the EU average of €33,550. But this is a fairytale and not the real story of how Irish people live.
GDP is the measure used when comparing countries’ wealth. It’s calculated by dividing a country’s economic output by its population, sometimes adjusted to account for price differences across borders. For Ireland this paints a wildly flattering picture as our GDP is exaggerated by multinational corporations shifting profits here – and not because the average person is swimming in cash. It’s like saying “your household is rich because your neighbour parks their yacht in your driveway”.
To get a clearer picture, Ireland’s Central Statistics Office (CSO) created a better gauge called modified Gross National Income (GNI) This removes the distortions from inputs like tech firms’ accounting methods and aircraft leasing. Using GNI Ireland slides from second to fourth in the EU sitting at about 124% of the EU average behind the Netherlands and Denmark. Back in 2019 we were eighth, so we’ve climbed a bit, growing faster than many of our EU neighbours. Still, it’s difficult to believe we’re richer than countries like Germany or Sweden which look just as prosperous, if not more so.
A better way might be to gauge our wealth by looking at what people actually spend on groceries, rent and education, then add to the mix Government supports like social welfare and/or childcare and we have what’s called Actual Individual Consumption (AIC). According to Eurostat, Ireland’s AIC is middle of the EU average at 99%, up from 94% in 2019. High savings in Irish households might make our spending look lower than it could be but it’s a far cry from the GDP fantasy.
But there’s good news too. Our economy is genuinely strong. In mid-2025, 2.82 million people were employed, a record, up 2.3% from last year. Immigration added 49,200 workers and more people, especially women, are joining the workforce with participation at 66.4%. Construction jobs went up by 18%, though tech jobs dipped by 4.1%. Unemployment is low at 4.8% and while 20.7% of workers are part-time many want more hours.
The GDP mirage infamously dubbed ‘Leprechaun Economics’ after a 26% jump in 2015 skews everything from EU budget contributions to global perceptions. By combining GNI and AIC Ireland’s probably on par with or just behind Northern Europe’s heavyweights and ahead of southern nations. We’re “a solid mid-tier success not a global elite”.
But wealth isn’t just money. Housing struggles for young people, uneven services, and even our rainy weather shape how ‘rich’ we feel.
Policymakers should focus on fairness and sustainability, not chasing fake rankings.
Ireland’s doing well… let’s keep it real.
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