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The ‘Celtic Tiger’ learns to purr
Author(s): Zdeněk Čech and John Macdonald
The ‘Celtic Tiger’ learns to purr 
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Ireland was the success story of the 1990s, ranking as the fastest growing economy
in the European Union. This strong performance has brought Ireland from among
the laggards to a star performer, with per capita income based on GDP catching up
with and then significantly exceeding the EU average. Why was Ireland”s catch-up
so rapid? There were many factors, both long- and short-term, which prepared the
Irish economy for this impressive economic turnaround at a time of international
buoyancy. As a result, Ireland achieved a long overdue structural transformation,
while the proportion of its population at work increased rapidly over the 1990s,
mostly due to rapid inward investment, and productivity rose to the levels of other
industrialised countries. More recently, the Irish economy has shown remarkable
resilience and continued to grow at healthy rates. However, the extraordinary
performance of the second half of the 1990s, mainly due to the favourable external
environment and the sizeable pool of available labour at that time, is unlikely to be
repeated. Economic policies therefore need to focus on facilitating the adjustment of
the economy towards lower sustainable growth rates, while addressing structural
bottlenecks resulting from the past massive catch-up, and safeguarding
competitiveness by ensuring moderate wage increases.
(Country Focus 18. November 2004.
Brussels. 6pp. Graph. Bibliogr. free.)
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