Ireland’s Central Statistics Office started this year’s St. Patrick’s Day celebrations one week earlier by announcing a record 7.8% GDP growth of Irish economy in 2015. According to European Commission, the growth was broad-based and accompanied by strong job creation. Economic fundamentals are robust and point to strong GDP growth rates in 2016 and 2017. Ireland was badly hit by the financial crisis but the government finances are improving as strong revenue growth more than offsets increases in expenditure.
The Romanian economy experienced a similar upturn in 2015. Driven by domestic demand and investments, the GDP growth of 3.7% in 2015 is of the highest in the region and the EU. The economic projections for Romania are positive also according to the “Global Economic Prospects” report published by the World Bank in January 2016. GDP growth is expected to reach 3.9% in 2016, 4.1% in 2017 and 4.0 in 2018.
Irish companies continued to expand their footprint in Romania and other Central European markets. In 2015, Ireland’s exports to Romania were valued at €345m and Romania sold goods worth €111m to Ireland. If we add the trade in services, the total trade reaches nearly €0.6bn per annum. Trade is of course still dominated by multinational companies (the ones based in Ireland sell pharmaceuticals, the Romanian ones telecommunication equipment and electronics) but a number of Irish small and medium-sized companies spotted the opportunity and started to look for business partners in Romania. Actually, exports of Enterprise Ireland client companies (i.e. Irish indigenous small and medium sized businesses, SMEs) to Central Europe including Romania increased by 25% in 2014 and the expectations in 2015 and 2016 are high.
Apart from opportunities in agriculture and food sector (both have a huge potential in Romania), a number of Irish companies noticed the large pool of IT talent in Romania and started to outsource IT services or consider setting up a software development offices. There is significant room for co-operation between Irish and Romanian companies from the IT sector. According to ANIS, the Romanian software and IT services industry has confirmed its potential to exceed €4bn (2.5% of the GDP) before 2020 and become a real pillar to the local economy, generating four times higher added value per head than the country’s economy’s average.
Meanwhile, Ireland is emerging as a global technology hub. The sector is thriving, with exports and employment in both indigenous and multinational technology firms continuing to grow. In the last three years nearly 20,000 jobs have been announced by technology companies and the sector is responsible for 40% of Ireland’s exports. Ireland is home to the top 10 global technology companies, 9 of the 10 top global software companies, top 5 security software companies and top 3 enterprise software companies. This ecosystem makes sure that Irish IT companies are always linked to the latest technology developments in the world.
2015 has been full of good news regarding foreign direct investment flows to Ireland. The Industrial Development Authority (IDA) reported that the number of investments secured during the year rose to 213 from 197 in 2014. The list of largest projects in the IT sector included a new datacentre for Facebook in Clonee in Co Meath and expansion of Apple in Athenry, Co Galway.
Enterprise Ireland, the Irish government agency responsible for the development and internationalisation of Irish indigenous companies, stated that Irish SMEs have created over 21,000 new jobs and brought their total workforce to 192,000 in 2015. Enterprise Ireland is working to help clients find new customers, projects and export opportunities overseas, assist with commercialisation of research, attract new international start-ups to Ireland and overcome barriers such as access to finance or the challenge of finding talent. Irish companies are on the right track to explore trade and internationalisation opportunities in Romania and grow their business.