Economy of Ireland

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Economy of Ireland I. Introduction The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. Since the mid 1990's, Ireland has experienced consistent growth rates of up to 10% per annum. This has been attributed to years of strong government planning through the implementation of five-year National Development Plans. These plans provided for large-scale investment in infrastructural projects and the focused development of Ireland as a base for multinational export-oriented companies. Ireland was transformed from one of the poorest countries in Western Europe to one of the wealthiest.…show more content…
This attitude suited the developers down to the ground. Developers and builders launched into buying land and building huge housing estates (with money they didn’t have) and consumers, us, launched into buying these houses (with money we didn’t have). This suited the banks down to the ground, lending more and more money expecting massive returns. The problem is someone at some stage forgot to tell them to stop building. Where were all the people going to come from to live in these houses? I don’t think unfortunately the full effect of the downturn has yet been felt by the industry as a significant number of infrastructure projects have yet to be completed. According to the CIC (Construction Industry Council) at its peak, construction represented 25% of GNP equating to €38.4bn. This level was unsustainable. IV. The Banking Sector The Irish banking sector has led a relatively fruitful life, especially over the last fifteen years or so and seemed that it would continue long into the future. The banks were joined at the hip with the construction sector and were making huge investments, albeit with shareholders money. The banks got into trouble because they got caught up in the mass psychology of an unprecedented property bubble – the steepest and longest of the several national property bubbles of the late 1990s and

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