Ireland’s economy shrank by 12.1% in the first quarter of 2026, following a revised 4.2% contraction in the previous quarter and far exceeding the initially estimated 2.0% decline. Modified domestic demand—a broad indicator of underlying activity that includes household, government, and investment spending—rose by 0.6%, while Gross National Product (GNP) expanded by 1.5%.
Sectors dominated by multinational enterprises (MNEs) recorded a steep 27.1% decline. Within this group, industry (excluding construction) fell by 35.0%, and the information & communication sector contracted by 2.0%. In contrast, domestically oriented, non-MNE sectors grew by 0.4%, supported by a 1.5% increase in the professional, administrative & support services sector and a 1.2% rise in construction.
On the expenditure side, exports fell by 7.0%, while imports grew by 4.2%, leading to a 39.8% collapse in net exports. Capital investment jumped by 13.8%, although investment in machinery and equipment declined. Household consumption rose by 0.6%, and government spending increased by 0.5%.
