Ireland may not seem to one of the most powerful countries in Europe, but there are also many misleading statistics that surround the State. This leads to a misconception of what the residents of the country truly experience and how life in Ireland plays out. Statistics such as per capita GDP, the Human Development Index, and GDP per head are skewed because of international relations within Ireland. Many times people look at one of the previously mentioned statistics and assume everything about a country on that one number. But you cannot presume that off of one indicator. Multiple accounts and indicators will have to be taken into account when determining the overall status and standing of a country.
Looking at Ireland, many individuals are inclined to believe that the numbers do not show the country as prosperous, but if the small city-state of Luxembourg was taken out of the GDP, Ireland would have the highest GDP per head in all of Europe. When looking at the composite representation of a country, GDP and GNI may not be enough to have a proper measurement. Even alternative numbers such as HDI are generally a combination of other measurements. Even comparing the GDP of one country to another is not always efficient, simply due to the fact of differing patterns of relative pricing on products from country to country.
The Bank of Ireland has done these price adjustments to compare each country’s purchasing power and the latest published study from 2017 shows that Ireland’s per capita GDP comes up as 5th highest in the 182 countries tested, and of these countries, Ireland is placed first out of any country within Europe. This overall large strength is mostly due to the large amount of international IT and pharmaceutical companies that have stationed many of their branches in Ireland. This has led to export in such products which has generated much revenue to combat the current lack in employment and economic activity throughout most of Ireland.
During the pandemic, Ireland has had many shortcomings in terms of economic welfare due to the activity of multinational companies. Therefore, the publishing of the Bank of Ireland’s study showing that Ireland is first in Europe can be quite misleading. After a more careful investigation which we will continue in parts 2-4 of this blog series, we will explore why Ireland is truly placed at around 8th-12th place in the European Union. This lower ranking comes at a surprise to some, but there is also logical reasoning behind its appearance.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.
Relevant Links: GDP, How to summarize wealth in a country, Global Firms National Accounts, Ireland’s Situation