Ireland’s domestic economy grew by 4.9% in 2025, significantly outperforming forecasts, according to new figures released by the Central Statistics Office (CSO) on Thursday. The growth was largely driven by rising personal spending, which increased by 2.9% over the year.
Gross Domestic Product, which measures the total economic output including multinational activity, surged by 12.3%, highlighting the continuing impact of foreign-owned companies on the Irish economy. The sector dominated by multinationals expanded by 25%, fueled in part by a €22.9 billion rise in net exports as firms accelerated shipments ahead of planned increases in US tariffs. Modified investment also climbed 10.9%, reflecting robust capital spending.
Construction and building activity recorded strong growth, with overall building up 9.1% and new home construction rising 19.4%. The CSO noted that the expansion included increased investment in data centres. Government expenditure rose by 4.1% over the year, supporting broader economic activity.
Kieran Cullane, a CSO statistician, said the figures underscore both domestic demand and investment-driven growth, noting that “the construction of data centres has been a particularly strong contributor to economic activity in 2025.”
Quarterly data for the last three months of 2025 showed a 3.8% decline in GDP but a 1% increase in the domestic economy, reflecting the volatility that can appear in shorter-term measures. The annual figures provide a clearer picture of underlying growth.
Tánaiste and Minister for Finance Simon Harris said the data confirmed the resilience of Ireland’s economy despite global headwinds. “While the headline figures may somewhat overstate underlying growth, I am encouraged that consumer spending grew by a solid 3% last year. This reflects rising real incomes and the strength of our labour market, with a record 2.83 million people in employment at the end of 2025,” he said.
Harris highlighted construction as a key driver of domestic momentum. “Building and construction investment recorded robust growth, up 9% last year, reflecting strong activity in the residential sector,” he noted.
The minister cautioned that uncertainty remains a factor for the year ahead. He pointed to the ongoing conflict in the Middle East as a potential headwind for global growth and inflation. “The impact on commodity prices will hinge on the duration and extent of supply disruptions,” Harris said, adding that the Department of Finance is closely monitoring international developments.
Ireland’s economic growth in 2025 outpaced other European Union countries, all of which recorded GDP growth of less than 4%, underscoring the continued influence of multinationals and domestic investment on the country’s economic performance. The CSO said the figures are preliminary and will be updated later in the year.
