ESRI Working Paper: Demographics and investment drive Irish economic growth projections (esri.ie)

• Recent Irish growth relies heavily on population increases; TFP and investment contributions are low.
• Underlying investment rate (~20%) is far below Celtic Tiger levels; raising it to 25-30% could add 0.9% annual growth.
• Working-age population to peak in about 10 years; proportion of 15-64 age group already declining, threatening future growth and pension sustainability.

"This ESRI working paper analyses Irish economic growth from 1995-2023 using a Solow model. It finds that recent growth has been primarily driven by population increases, with total factor productivity and investment making modest contributions. The underlying investment rate is around 20%, well below Celtic Tiger peaks. Scenarios show that raising investment to 25-30% could boost output growth by up to 0.9% per annum above baseline. Demographic projections indicate the working-age population will peak in about a decade, posing fiscal sustainability challenges. The paper uses modified national accounts metrics to correct for multinational distortions."