The Legacy of the Celtic Tiger: Background and Outlook to Ireland’s Economic and Financial Crisis

In the early nineties and right up to 2007, Ireland enjoyed a period of rapid growth that radically transformed the country. Initially, this growth was chalked up to increased productivity and exports, but as of 2000, it began to rely heavily on domestic demand, mainly in the construction sector. When the real-estate bubble burst in 2007, public finances, banks and employment were hit hard, which, compounded by the international financial crisis, lead to a severe economic downturn in 2008 and 2009. Thanks to the swift and drastic measures taken by the Irish government to control the tax deficit, prevent the collapse of the banking system and lay the foundations for renewed economic growth, Ireland is now on the path to recovery and has a favorable outlook.