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Page 1: Ireland update

Investment & Economic Update

November 2010

Page 2: Ireland update

Summary – Returning to Growth

• Growth predicted for 2011 (GDP +2.25%)• Manageable debt ratio• 12.5% Corporation Tax Rate Guaranteed• Robust Export Performance• Growing FDI Community• Competitiveness improving significantly• Capital Investments continuing

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TransformationIreland’s Economy 1995-2010

GDP per Capita 100% increase

Debt:GDP 88% 97%

US Investment $11b $165b

Exports €35b €156b

Employment 1.3m 1.9m

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Irish Economy Today

-10.7%

-0.25%

+2.25%

-11.4%

-1.50%

+2 %

-4.5% -0.5% +1.75%

-4.1% +5% +4.75%

-4.9% 0% +2.25%

2009 2010GDP

GNP

InflationExports

*Balance of Payments (Current % of GNP)

BoP*

2011

Exports continue to perform robustlyConsumption and investment levels stabilisingGrowth predicted for 2011

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Durable SectorsICT 7 of the world’s top 10 companies

Pharmaceuticals 16 of the world’s top 20

Medical Devices 140 major companies

Financial Services 50% of the world’s top banks

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7 of the world’s top 10 Companies

83,000 employed

Over 200 FDI firms

One third of all exports

ICT SECTOR

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Pharmaceutical Sector

16 of the world’s top 20 Companies

24,000 Employment

€44 Bn exports

50% of total

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Med Tech Sector

24,000 employed

160 companies

€6.8 billion exports

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Financial Services Sectors

Half of the world’s top banks

59,500 Employed

450 companies

€15 billion exports

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Government Finances

• Government introducing 4 year deficit reduction plan

• EU approved Stability plan

• Exchequer fully funded to July 2011

• Debt/GDP ratio in line with EU Average

• Bank support accounted for in 2010 is spread over 10

years

• The debt rate is manageable & not expected to be

greater than the early 1990s.

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US Ireland Investment Relationship

Ireland in the US US in Ireland

• 1,300 Business

Operations

• $34 Billion invested

• 82,000 jobs

• 600 Business

Operations

• $165 Billion invested

• 100,000 jobsBilateral Ireland/US Trade of €27 billion

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Competitiveness Realigning our costs

• “Property costs falling sharply.”• Rent down 45%• Dublin has fallen from 20th to 33rd in terms of office

occupancy costs (DTZ)• “Irish labour costs becoming significantly more

competitive”• Salaries for new employees down between 5 % and

22% ( Irishjobs.ie)• Versus the EU 13% improvement in wage costs

• Cost of Living reduced• Consumer Prices fell 1.7% in 2009.

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Competitive Tax Jurisdiction

• Our 12½% corporation tax rate remains – and will continue to remain.• Finance Minister Brian Lenihan issued a

statement on behalf of the Irish Government re-affirming Ireland's long-term commitment to the 12.5% corporate tax rate as "a cornerstone of Irish industrial policy.

• 60 International Tax Treaties• EU & OECD approved

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Investing in Our Future• New Nationwide Highway Network of 740 Km• New 72,000 M2 International Airport Terminal• First two European airports with full US Customs &

Border Clearance• Rail stock doubled & 650 Km of new tracks laid• New state of the art Convention Centre- 8,000 capacity• Two Dublin Metro lines planned and committed too• ICT for Schools Programme- 60,000+ new computers

when?

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Global Endorsements• “Ireland faced a significant competitiveness disadvantage in 2009, but its real

effective exchange rate is currently viewed broadly in line with medium-term fundamentals. This improvement was associated with a deep recession, but Ireland has recently returned to relatively rapid growth” IMF Sept 2010

• According to the 2010 Global Location Trends report by IBM Ireland is the top destination globally for jobs by inward investment per capita.

• A European Commission study of third level education 2010 stated that International recruiters believe that Ireland produces the most highly-employable graduates in the world.

• According to the 2010 KOF Globalisation Index, Ireland is ranked as the second most economically globalised country in the world.

• Ireland is among the world’s most competitive locations for R&D investment, and the most competitive in Europe according to a major study by accounting and consulting firm, Mazars.

• Ireland has been ranked 8th in the world for quality of research in Materials Science over the past decade, according to Thomson Reuters.

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Why Ireland?

M

ult

inati

on

al Experi

en

ce

Irela

nd

Flexibility of labour law versus continental Europe

Skills Availability with business and technical knowledge

Productivity and strong work ethic of Irish staff

Adaptability of Irish staff when faced with new challenges

Pro-business Environment excellent IP protection and low CTR

Ease of global communications (language & time difference and telecoms)

Ireland ahead of the curve immediate response to banking & global crisis

Ease of Doing Business

Excellent multilingual availability

National Strategy & foresight Green agenda & Convergence

Constant Reinvestment of Multinational Clients

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Conclusions• Ireland is returning to growth• Led by durable exporting industries• Public Finances are secure• Costs are falling and productivity increasing• FDI continues to grow• 12.5% tax rate guaranteed• Capital Investments producing results

Ireland is open for business

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For Further Information

American Chamber of Commerce Ireland

+353 (0)1 661 6201

[email protected]

Disclaimer: The information contained in this document is meant for general information purposes only. The information contained in these notes is not guaranteed, although the American Chamber has aimed to ensure its accuracy. Any expressions of opinion are subject to change without notice.