Published by Global Banking & Finance Review®
Posted on December 4, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleIreland's domestic economy grew 2.3% in Q3, driven by investment, while GDP remains high due to pharmaceutical exports.
By Padraic Halpin
DUBLIN, Dec 4 (Reuters) - Ireland's domestic economy grew by 2.3% in the third quarter compared to the previous three months, while the more volatile gross domestic product (GDP) was 0.3% lower following an early year surge, Central Statistics Office (CSO) data showed.
With Ireland's large multinational sector often distorting GDP, officials prefer to use modified domestic demand (MDD) to gauge the strength of the economy and the quarterly growth was almost entirely driven by an 8.3% jump in modified investment.
MDD was up 4.1% year-to-date while GDP, which has at times diverged sharply from activity in the domestic economy in recent years, was 15.8% higher for the first nine months of the year thanks to a huge increase in pharmaceutical exports to the U.S.
More than a dozen of the world's biggest pharmaceutical multinationals have plants in Ireland, where many make active ingredients for the U.S. market.
While some reported stocking up ahead of threatened tariffs on the sector earlier in the year, inflating the first quarter Irish and euro zone GDP figures, exports from Ireland to the U.S. jumped again in September to keep GDP at an elevated level.
Personal consumption, while up a solid 2.9% in 2025, was weaker from July to September and rose by just 0.1% with spending on services flat and slightly higher for goods.
The jump in modified investment was due to an increase in the purchasing of software and aircraft, and enhanced research and development activity by domestic companies, the CSO said.
Irish airline Ryanair, Europe's largest by passenger numbers, reported a quickening of the delivery of new aircraft from Boeing during the third quarter, likely adding to the jump in investment in the economy.
Ireland's finance ministry in October increased its MDD growth forecast for the year to 3.3% from 2% previously, after the economy shrugged off any material impact from increased U.S. tariffs on the European Union.
(Reporting by Padraic Halpin; editing by William James and Ed Osmond)
Gross Domestic Product (GDP) measures the total economic output of a country, representing the value of all goods and services produced over a specific time period.
Economic growth refers to the increase in the production of goods and services in an economy over a period, typically measured by the rise in GDP.
Consumer spending is the total amount of money spent by households on goods and services, which is a key driver of economic activity.
Modified domestic demand (MDD) is an economic measure that excludes the impact of volatile factors like multinational corporations' activities, providing a clearer view of domestic economic strength.
Pharmaceutical exports refer to the sale of medicinal products manufactured in one country to another, significantly impacting the economy of the exporting country.
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