Ireland’s economy: GDP to grow by 1.7% according to IBEC forecasts
Ireland’s economy is in a rather precarious position. According to IBEC analysts, it has reached a turning point that affects most processes. This trend will lead to a slowdown in growth over the next few years.
Forecasts by the Irish Business and Employers Confederation (IBEC) point to the following changes in the near future:
– domestic demand will grow by 3% in 2025 and 2.7% in 2026;
– employment growth will slow by 2.4% in 2025 and 2% in 2026;
– GDP will grow by 1.7% in 2025 and 2.1% in 2026.
Nevertheless, analysts remain cautious about GDP growth. The fact is that its momentum depends on many factors, including the impact of multinationals’ profits.
The economic slowdown is linked to the uncertainty that prevails in the global market. Many international trading partners are in a precarious position because of expectations of innovation. European companies, for their part, are trying to transform their business model in order to adapt better to these realities. Many multinationals are optimising processes to reduce energy costs.
External and internal risks
Like other global economies, Ireland’s economy is feeling the pressure of changes in US policy. According to IBEC’s Danny McCoy, the new US administration plans to implement a number of drastic measures. Donald Trump’s administration is deciding which trading partners – domestic and foreign – to prioritise. This could have an impact on the Irish market, which is struggling to gain a foothold in the global market.
Trump’s key innovation is tariffs on imported goods. The rates range from 10% to 20% for all countries except China, where the tariff is set at 60%. The US president justified this decision by saying it would help local producers. Reduced competition will contribute to business growth and an economic boom in the country. At the same time, experts warn that such a move will lead to inflation. The tax cuts announced by Trump also increase the risk of rising interest rates and government debt.
High interest rates will, in turn, lead to a rise in the value of the dollar. This will affect the Irish economy by making imported goods more expensive for local consumers. At the same time, analysts believe that the gap between the euro and the dollar is likely to widen. In this case, the price of Irish goods will fall for buyers in the US.
Ireland’s economy also faces domestic problems, including low housing affordability. The need to improve transport infrastructure is also an important issue.
Rising capital costs are a limiting factor for investment in local businesses. Economic uncertainty and ineffective budgetary measures exacerbate the situation.
