Ireland’s economy grows 26.3% in 2015 as corporations flock to low tax rate

Ireland’s economy grew by more than 26.3 per cent in 2015, largely as a result of “corporate restructuring,” the country’s Central Statistics Office said on Tuesday, reports The Independent.

Much of the growth is the result of a number of multinationals that moved their headquarters to Ireland last year, to take advantage of a corporate tax rate of 12.5 per cent. This compares to an OECD average of 24.85 per cent and a US rate of 38.9 per cent.

A press statement from the CSO explained the upward revision from the 7.8 per cent it had originally reported in March was the result of “an increase in the number of new aircraft imports for Ireland,” as well as “corporate restructuring both through imports of individual assets and also reclassifications of entire balance sheets.”

€300 billion of assets were transferred to Ireland last year, the CSO figures show. This amounts to €66,700 for each of its 4.5 million population.

However, the CSO noted that that “employment has not changed greatly as a result.”

Analysts have doubted that the figures represent the true position of the Irish economy, which emerged from a €67 billion bailout from a troika of international creditors led by the International Monetary Fund two years ago.

“The 26.3 per cent makes for a great media headline. But if the media want to go find this growth, they might as well go plane-watching at Dublin airport,” said Aidan Regan, assistant professor in the School of Politics and International Relations at University College Dublin.

Speaking to Reuters, KBC chief economist Austin Hughes said, “The reality is that the average household didn’t wake up phenomenally richer this morning. Public and private debt still remain where they are and Brexit will still have the same sort of impact envisaged.”

Michael Noonan, Ireland’s finance minister, said in a statement that the figures showed Ireland was enjoying “real growth”.