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Finance | Addressing economic competitiveness and the appeal of foreign direct investment

To ask the Minister for Finance the degree to which he remains satisfied that Ireland’s economy remains adequately competitive; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.


For WRITTEN answer on Tuesday, 24 January, 2023.

To ask the Minister for Finance the degree to which foreign direct investment remains an attractive option given the need to ensure that Ireland continues to benefit; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.


For WRITTEN answer on Tuesday, 24 January, 2023.

REPLY


Ireland has a long-standing reputation internationally as a stable and pro-enterprise economy, reflected in our continued ability to attract and retain foreign direct investment (FDI). I am conscious of the need to maintain our competitive position on an international stage, given the contribution of this FDI to the domestic economy.

Latest data shows that the stock of FDI in Ireland stands at almost €1.4 trillion. Furthermore, the IDA reported the highest ever increase in FDI-related employment last year, with a 9 per cent increase in employment on 2021. The numbers employed in the multinational sector in Ireland last year are estimated at over 300,000 according to the IDA, with even more jobs in indigenous SMEs supported indirectly by the presence of this investment. Multinational enterprises also contribute to the economy by way of income and corporation tax receipts.

However, the world is facing into another year of considerable uncertainty. As a small, open economy, Ireland is particularly exposed to risks in the global economy, including further shocks to energy supplies and heightened geopolitical tensions.

Given that many of these factors are out of our control, it is important to focus on what we can control to ensure that Ireland retains our competitive advantage. This includes strengthening our strong legal and regulatory landscape, promoting our reputation as a stable economy in which to start and scale up a business, while continuing to invest in our talented and flexible workforce. Indeed, recently introduced measures in Budget 2023 aimed at incentivising employment via income tax cuts and increased childcare subsidies will have added to Ireland’s reputation for attracting and retaining talent.  

In the year ahead, this Government will continue to support FDI, investing in key infrastructure and skills, as continued investment will be critical in supporting the domestic economy through the current global crisis.

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