The Irish economy is growing as fast as China

Call it the luck of the Irish economy.

Ireland is booming. It increased by almost 7% last year. It’s much better than the US and on par with China (or, at least, what the Chinese government claims).

The Emerald Isle has won the award for “Best Economy in the Eurozone” each of the past two years and is expected to continue to do so much this year.

Ireland’s economic success was not certain. The country was hit hard by the financial crisis and the Great Recession. The big Irish banks were on the verge of collapse due to excess lending, especially on speculative real estate deals. Public debt has skyrocketed and unemployment topped 15%, which is significantly higher than what the United States has known.

Only a few years ago, experts warned that Ireland, Spain and Portugal could be the “next Greece”. Ireland received 67 billion euros ($ 73 billion) in international bailout loans in 2013, after its housing market collapsed and banks began to fail.

Now the Irish have one more reason to celebrate St. Patrick’s Day. Recently unemployed fell to 8.6% and no one talks about an Irish fault anymore.

“Ireland has rebounded from the best of any economy after the recession,” said Martin Schulz, head of international equities at PNC Capital Advisors.

celtic tiger ireland economy

Related: Bailouted European Economies Are Booming (Greece Excluded)

How Ireland Did It

The road to success seems simple: Ireland quickly canceled bank debt and carried out sweeping financial reforms, says Schulz.

The government cut costs and focused on growing exports. This turned out to be a smart move as the euro lost value, allowing Irish (and European) exports to flourish.

Reform measures have not always been popular. Despite Ireland’s ‘Celtic tiger’ growth miracle, Prime Minister Enda Kenny is struggling to hold on to power after his party lost seats in the last election.

But as many countries, especially in Europe, are struggling to revive growth, Ireland is a symbol of hope.

President Obama hailed “significant progress in rebounding the Irish economy” when he met with Acting Prime Minister Kenny on Tuesday.

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Ireland is widely known as a tax haven. Several large American companies have set up their headquarters there (or are trying to settle there) to save money on taxes.

But the European Commission stresses that the real Irish economy is also growing. It’s not just foreign companies.

“While the recovery has started in the external sector, domestic demand is now the engine of GDP growth,” said an recent EU report concluded.

–CNNMoney’s Ivana Kottasova contributed to this report.

CNNMoney (New York) First published on March 17, 2016: 1:33 p.m. ET

Pat R. Madsen