{"id":219858,"date":"2025-12-31T12:37:10","date_gmt":"2025-12-31T12:37:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/219858\/"},"modified":"2025-12-31T12:37:10","modified_gmt":"2025-12-31T12:37:10","slug":"irish-economy-set-for-robust-growth-but-risks-remain-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/219858\/","title":{"rendered":"Irish economy set for robust growth, but risks remain \u2013 The Irish Times"},"content":{"rendered":"

Ireland\u2019s economy is expected to be among the top five performers in Europe next year, continuing momentum from 2025, economists have predicted.<\/p>\n

But the threat from global trade tensions<\/a> and challenges posed by infrastructure issues and stock market uncertainty could affect growth, KPMG<\/a> economic experts warned, with the wider European region risking falling behind in the race for economic security if it fails to act. <\/p>\n

The KPMG Irish Economic Outlook for 2026 predicted Ireland\u2019s gross domestic product would grow 3 per cent, supported by a combination of strong demand, employment and strategic government investment. <\/p>\n

Modified domestic demand, a measure that attempts to strip out the distorting effect of multinationals, is expected to grow 2.5 per cent over the year. <\/p>\n

The survey also pointed to strong deal activity, both in Ireland and globally, that indicated optimism among business leaders.<\/p>\n

Export growth is expected to continue, driven by pharmaceuticals<\/a>. <\/p>\n

That compares to growth in Europe and the UK, which is expected to reach 1 per cent in terms of GDP. The US, meanwhile, is forecast to reach 3 per cent growth as data centres<\/a> and artificial intelligence<\/a> (AI) play a big role. <\/p>\n

\"\"Another huge corporate tax take to AI\u2019s next phase: What\u2019s in store for 2026?<\/p>\n

\u201cIreland\u2019s economic growth in 2025 far outpaced its European peers, underscoring its economic resilience. Our growth in 2026 will be heavily linked to sales of a few pharma drugs, AI adoption in the workplace, and construction,\u201d Daragh McGreal, head economist at KPMG in Ireland, said. <\/p>\n

\u201cOur nearest trading partners are forecasting sluggish growth and global headwinds, and shifting trade patterns mean we must grow our trading relationships with economies in Asia, Latin America, and the Gulf and broaden our manufacturing base. <\/p>\n

\u201cThe economy is proving robust, but we face a growing range of risks.\u201d <\/p>\n

The threats to the economy come from domestic and international sources, the report said, noting the housing crisis and transport delays in the Greater Dublin Area<\/a> were continuing challenges. <\/p>\n

Recent moves by the Government, including the \u20ac103 billion National Development Plan<\/a> and \u20ac19 billion capital budget for 2026, could have a positive impact, but the report warned that could be affected by any delays or cost overruns.<\/p>\n

Although wage growth is expected to continue in 2026, remaining robust across most sectors, the predicted average growth of 3 per cent in the year runs the risk of being outstripped by rising costs. That follows 2025\u2019s growth of 5 per cent, with inflation in groceries, rent and house prices at 7 per cent throughout the year. <\/p>\n

\u201cPrice levels remain high compared to peer EU countries, especially for essentials like food and clothing,\u201d Dr McGreal said. \u201cWage growth is being eroded by prices and static income taxation. There is a real risk of a disconnect between strong economic growth and what people see in their wallets.\u201d <\/p>\n

Employment growth is expected to remain positive, but moderate to 1.5 per cent, while unemployment is expected to settle around 5 per cent.<\/p>\n

\u201cIreland has got used to record jobs growth and falling joblessness. These trends are slowing,\u201d he said. <\/p>\n

\u201cWe are seeing a normalisation to euro zone levels. And AI is really starting to aid productivity in some sectors in Ireland. The big opportunity is maximising AI access across the economy.\u201d<\/p>\n

The report also pointed to European reliance on China<\/a> for critical raw materials and the energy transition, saying the region was at a \u201cgeoeconomic crossroads\u201d and needed to recognise that supply chain vulnerabilities and strategic competition are immediate risks to growth and stability.<\/p>\n","protected":false},"excerpt":{"rendered":"Ireland\u2019s economy is expected to be among the top five performers in Europe next year, continuing momentum from…\n","protected":false},"author":2,"featured_media":26937,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[218,72,114,5691,113,91363,61,60,18040,3413,8877,1628],"class_list":{"0":"post-219858","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-artificial-intelligence","9":"tag-business","10":"tag-china","11":"tag-data-centres","12":"tag-economy","13":"tag-greater-dublin-area","14":"tag-ie","15":"tag-ireland","16":"tag-kpmg","17":"tag-national-development-plan","18":"tag-pharma","19":"tag-trade"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/219858","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=219858"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/219858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/26937"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=219858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=219858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=219858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}