It's always important for businesses to keep an eye on developments in the wider economy. Consideration of economic trends can help businesses plan ahead - whether it’s for inflation-busting cost-saving measures or planning recruitment in a tightening labour market. 

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Thankfully, the Irish economy has been resilient in the face of the covid pandemic and the inflationary pressures caused by the war in Europe. A recent report showed that Ireland was the top-performing OECD economy in 2022 with GDP growth of 10.1% and is forecast to remain the top economy in 2023 with growth of 3.8%.

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However, it's important to look beyond the headlines. For many SMEs the domestic market is key and while GDP is forecast to grow by 3.8% in 2023 when multinational activity that does not affect the domestic economy is stripped out, the growth rate falls to 0.9%. Inflation is forecast to fall in 2023 but will still remain high at 7.2%

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The outlook for our nearest neighbour and closest trading partner, the UK, is not as rosy – with GDP growth of only 4.4% in 2022 and a forecast recession in 2023 with negative growth of 0.4%, This is well behind most EU and major economies.  So, while the economic outlook is overall relatively positive, businesses will need to focus on cost control and eking out growth in the domestic market.

The key economic indicators are reproduced below: