Ireland’s economy expanded by more than three times the previous estimate last year, posting growth of more than 26% following a flurry of foreign investment.



The Irish economy grew by 26.3% in 2015, compared with the expected rate of 7.8%, after foreign companies that switched their base to Ireland were included in the value of its corporate sector, pushing up the value of the state’s balance sheet.

The process of switching tax domicile after a merger or acquisition, known as an “inversion”, has increased in recent years, and Ireland has become a popular end destination in these corporate manoeuvres because of its low corporate tax regime.

Several US companies, including drugs maker Allergan, security systems provider Tyco and medical technology specialist Medtronic have domiciled in Ireland by buying a smaller Irish-registered rival and “inverting” into an Irish corporate structure.

A surge in aircraft imported into Ireland by leasing companies that send the jets out on loan to airlines was also among the main reasons for the economic growth. Lease operators based in Ireland account for about 20% of the global market, with sales of €7.8bn (£6.6bn).

Michael Connolly, a senior statistician at the Central Statistics Office, said: “What happens here is that an entire balance sheet of a company relocating to Ireland from somewhere else is included in our capital stocks or our international investment position.



“The very dramatic increase has increased the capacity for production in the economy and impacts the accounts for 2015 in the increase of exports and imports.”

Earlier this year, the US president, Barack Obama, called on Congress to close down inversion deals, describing them as “one of the most insidious tax loopholes out there”.

“When companies exploit loopholes like this, it makes it harder to invest in the things that are going to keep America’s economy going strong for future generations,” he said in response to a deal by drugs maker Pfizer intended to redomicile from its headquarters in New York to Ireland by purchasing Allergan, which was later abandoned.