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Ireland ended 2025 in a technical recession, according to preliminary data from the Central Statistics Office (CSO).
Ireland’s economy shrank in the last three months of 2025, according to early estimates from the statistics agency.
These early estimates indicate that Gross Domestic Product (GDP), a standard measure of economic size, decreased by an estimated 0.6pc in Quarter 4 2025 – the last three months of the year, when compared with the previous month. That followed a decline of 0.3pc in the previous three months.
Two back-to-back quarters of GDP decline is the standard measure of a technical recession, although by most measures the Irish economy continued to perform strongly in the second half of the year including a bumper tax take, although unemployment did creep up to 5pc.
The latest GDP decline was mainly driven by contraction in the multinational dominated Industry sector, the CSO said.
The numbers are early estimates and subject to revision – but if correct will be a cause of worry at a time of already heightened anxiety around the impact of Donald Trump’s tariff policies.
That will be clearer when the more definitive Quarterly National Accounts are published in early March, which drawn on additional data sources.
Regardless of the final numbers for Q4 the Irish economy grew strongly in 2025 as a whole, in GDP terms. That’s largely down to a huge 7.4pc growth spurt in the first three months of the year. That’s been ascribed in part to an element of ‘front loading’ by multinationals of exports to the US to beat the impact of tariffs, but also reflects increased capacity in the Irish pharmaceutical supply chain, after years of investment.
That includes a particular contribution by drug giant Eli Lilly, which manufactures ingredients for its weight loss drug Mounjaro and its diabetes drug Zepbound in Kinsale, Co Cork.
Sustaining the level of growth in the first three months was always likely to be challenging, even if exports levelled off at new, elevated, levels.
Measuring Ireland’s economy in any meaningful way is fraught. GDP is the standard measure used to compare economies but in the case of Ireland it is volatile even at the best of tines because of the outsized impact of multinationals.