DUBLIN — Ireland’s investment promotion agency warned on Wednesday of a “very challenging” two years for the country’s economy if the coronavirus pandemic leads to investment plummeting along predicted lines.
Though Ireland is a popular base for US businesses operating in the European Union, a looming plunge in global foreign direct investment (FDI) will leave ireland facing “heightened competition” for new projects, according to state body IDA Ireland.
The United Nations Conference on Trade and Development (UNCTAD) warned in June of a 40 per cent drop in worldwide FDI due to the pandemic.
“We will have to fight harder than ever before for new investment projects,” said Leo Varadkar, Minister for Enterprise, Trade and Employment.
IDA Ireland reported a 6 per cent decline in FDI during the first half of 2020, with investments in the production of medical devices and pharmaceuticals to curb the novel coronavirus helping keep overall FDI close to levels seen a year ago.
“Medtronic in Galway increased the production of ventilators to meet worldwide demand for the life-saving devices, from 200 ventilators a week at the end of February to more than 1,000 a week by the end of June,” said Varadkar, who is also deputy prime minister, speaking at the launch of IDA Ireland’s half-year results on Wednesday.
IDA Ireland CEO Martin Shanahan said ireland’s “open” economy means recovery will be “partly influenced by global factors, which are very negative in the near-term and uncertain in the medium-term.”
The Central Bank of Ireland said last week that Ireland’s economy could shrink by almost 14 per cent in 2020, though the European Commission on Tuesday said a contraction of 8.5 per cent was possible.
Internet and social media giants such as Facebook, Google and Twitter have made Ireland their European base, while tech brands such as Apple and Intel are longer-standing presence, drawn in part by a relatively-low 12.5 per cent corporation tax.
According to IDA Ireland statistics, over 1,500 transnational corporations employed around 245,000 people across the country by the end of 2019.Show