If a journalist came to Dublin to write an article about the recession, they’d have bad luck to run into Agustín López. The sommelier from Mendoza, Argentina moved to the city four months ago and found work precisely three days after arriving, without speaking English or any prior experience, in one of the most vaunted establishments in Temple Bar, the legendary pub district in the Irish capital. The 25-year-old López was trained in the world of wine and worked in wineries in his native land, but wanted to learn about whiskey, so he packed his bags. Now, he studies industry magazines during slow times, which are few and far between because in his workplace, full of nooks and crannies and literary references, the drinking is non-stop, from morning to night, by locals and foreigners alike. He has no complaints — the math is working out great for him: “The salary is $2,500, but tips can be over $115 on any given day, up to $230 on a good day,” he says.
It’s Monday, but it’s not raining and things are looking reasonably good for López. Tourists and Dubliners fill downtown, its stores, buses and restaurants. On the following day, the crowds grow. June 16 is known locally as Bloomsday, because it is the date on which the plot of Ulysses takes place. Dubliners celebrate the novel and its author James Joyce with tours of the city that recreate the story, and people dress up in period garb or in outfits that wink at the author’s personage, with round glasses and Latin quarter hats. On that day, even more people flood the stores, buses and restaurants.
The country’s positive domestic spending figures are in line with its overall picture, as well as its labor market. Ireland is currently enjoying full employment, with a rate of joblessness below 5%. In such a context, its macroeconomic statistic par excellence, gross domestic product, may come as a surprise. That metric shows that the Irish economy suffered a 12% drop in the year’s first quarter, the most drastic fall since such numbers have been recorded, according to the Bank of Ireland.
So severe has been the tumble of this country with just over five million inhabitants — a population only just bigger than that of Alabama — that it has weighed down the entire euro zone. The bloc experienced anemic growth at 0.1% during the same period, but when Irish officials released their downward figure, the collective balance entered into the negative, with an overall contraction of 0.2%.
In reality, what happened in Ireland can be attributed to a handful of multinational pharmaceutical corporations, whose sales have plummeted and sunk the country’s industrial sector by 27%, and with it, the GDP. That’s because these very countries increased their exports in 2025 to anticipate Donald Trump’s wave of tariffs, and as a result, the difference between this and the last fiscal year has turned national numbers upside-down.
It is often said that GDP does not tell the whole truth of what we call the real, flesh and blood economy, in any of the world’s countries. But Ireland is the epitome of the gulf between macroeconomic figures and reality, thanks to the enormous weight of its large multinationals. These total more than a thousand, the majority of which are from the United States and have relocated to the island nation thanks to its labor force and more amenable fiscal treatment, among other factors. In 2016, winner of the Nobel Prize for Economics Paul Krugman coined the charming term “leprechaun economics” to refer to this singular economy when it registered a growth of 25% over the previous year. Brexit, a pandemic, a tariff war and an energy crisis later, the leprechauns are back to doing their thing.
“We have a small but very globalized economy in that foreign multinationals represent 50% of the GDP, and the majority of their earnings leave the country, so GDP is not a good representation of the Irish economy,” explains Kieran Culhane, head of the integration division of the Central Statistics Office Ireland. “All countries have to deal with this impact, but when they are larger, it is not as noticeable,” adds the official, who also recognizes the difficulty of making predictions. The activity of a chemical plant located in Ireland has a real impact on these numbers, but the transfer of a technology’s intellectual property will move the needle dramatically. Irish authorities are so conscious of this distortion that they have developed their own macroeconomic indicator, the gross national income, which excludes this effect, but the figure is not comparable with other countries, and is only updated once a year, explains Culhane.
“GDP means next to nothing here,” says Dan O’Brien, chief economist at the Institute of International and European Affairs, a renowned Dublin think tank. “The domestic economy is in good shape,” he says, “its problems are largely related to its success, a very tight labor market that makes it difficult for companies to find and retain employees.”
His words are reflected by the speed with which Agustín López found work upon arriving in Ireland, as well as Dublin’s general hustle and bustle. Around 11% of Irish workers are in the pharmaceutical and technology industries, both of which offer good salaries. But there are challenges, significantly including cost of living. Eurostat compares the price levels of products and services paid by households in each country in relation to purchasing power, and Ireland comes in second on that list, with prices 36% higher than average, bested only by Denmark (40%). In the eurozone, it’s one of the highest by a landslide.
Foreign investment
Ireland, which was once one of the least dynamic countries in Europe, has become part of the globalization wave, taking advantage of U.S. interest in the unique European market and undergoing a rebirth in the 1990s, an era dubbed the Celtic Tiger. With the attraction of foreign investment as a key part of its agenda, it is now the European headquarters of several subsidiaries of emblematic groups like Meta, Apple, Microsoft, Pfizer and Illy, flagships of U.S. corporate power. Many of the offices of these tech companies and the startups born in the wake of the big players are located in Silicon Docks, as the Grand Canal Docks area alongside the Liffey River is now known.
A city of drinkers, literature and the faithful, Dublin lives up to many of its stereotypes. Also, that of being a magnet for large companies. The country’s 12.5% corporate tax rate is the best-known reason behind the love affair between Ireland and multinational corporations, but the reality is somewhat more complex. For years, international companies benefited from a tax maneuver with a suggestive name, that of the “Double Irish”, which very roughly speaking, worked like this: multinationals located their intellectual property in Irish subsidiaries controlled from tax havens like Bermuda, and Ireland considered them tax residents of those places. At the same time, the U.S. considered such firms tax residents of Ireland.
That loophole has been closed, but the attraction remains, and U.S. companies have continued to opt for Ireland due to other reasons, as Dan O’Brien reminds. “Don’t forget that they share a language here, it’s an established community and it is located further to the west, an hour less of travel by plane, and there are around 40 million U.S. residents who have Irish heritage and are very proud of that fact. Obviously, the fiscal system helps, but it doesn’t tell the whole story,” he says.
St. Stephen’s Green Shopping Centre, one of Dublin’s most popular, is hosting an exhibition about the Great Irish Famine of the 18th century, which forced nearly two million people to emigrate, and ended the lives of around half that number. In the 1840s, adult men ate nearly 14 pounds of potatoes a day as their only sustenance, one of the show’s plaques reminds. Another recalls the massive arrival of migrants to the United States mentioned by O’Brien.
Today, we’re living in a vastly different century — on another planet, one might say. On the streets of Dublin, posters speak more of the housing crisis faced by those looking for a place to live. Half of Ireland’s population lives in the capital, and the vertiginous rise of the housing market, particularly its luxury units, is a frequent subject of headlines. Last week The Irish Times published an article saying Roy Keane, the former soccer coach and now sports commentator, earned more than $570,000 in profit through the sale of an apartment he’d bought just three years ago in Lansdowne Place, a coveted area. Economic activity, the rise of tourism and population growth — 31% between 2002 and 2022 — has accelerated the housing market in a way that seems familiar in many other metropolitan areas.
“This is the worst city to rent. Lines form around the entire block just to see an apartment, young people are always leaving,” complains Kevin, one of the members of the Revolutionary Housing League, who asked to be identified by his first name because he had a court hearing the next day. His group occupied the former pub Ardee House, an enormous space with several floors on a street corner that had been abandoned since 2010, when it closed amid the euro crisis. Activists have turned it into a meeting space where they serve coffee and tea for donations, which pay for the site’s expenses. On Tuesday morning, a mother and daughter were seated at one of its tables and an elderly man was just leaving. A venture fund wants to build housing there, and the League is calling for more community spaces. “People are getting angrier, they spend all their money on making sure buildings stay empty,” Kevin says, his voice dripping in irony.
Aidan Regan, a professor of political economy at University College Dublin, warns of another new problem, “the rise of household energy prices due to data center expansion,” but he also emphasizes the real and positive impact of big companies, in terms of employment and also revenue for public coffers. That total reached nearly $38 billion last year and Ireland closed 2025 with a public surplus of 3.7%, $14.8 billion in cold, hard cash. “And they’re not shell companies, they have a real presence,” he says, though he does warn of the risks of excessive “concentration”. “I am one of those who for years has been arguing the need to diversify the model towards the growth of national companies,” he says.
Especially when your current business partner is named Donald Trump. Last March, when Irish Prime Minister Micheál Martin visited the White House to celebrate St. Patrick’s Day, the U.S. leader snapped, “We do have a massive deficit with Ireland. I have great respect for Ireland, for what they did and they should have done just what they did. But the United States shouldn’t have let that happen. We had stupid leaders, we had leaders who didn’t have a clue.”
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