{"id":639309,"date":"2026-09-29T07:52:12","date_gmt":"2026-09-29T07:52:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/639309\/"},"modified":"2026-09-29T07:52:12","modified_gmt":"2026-09-29T07:52:12","slug":"ai-boom-meets-energy-squeeze-as-irelands-economy-pulled-in-two-directions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/639309\/","title":{"rendered":"AI boom meets energy squeeze as Ireland\u2019s economy pulled in two directions"},"content":{"rendered":"

IRELAND\u2019S ECONOMY IS expected to continue growing despite higher energy costs, with booming global investment in artificial intelligence providing a potential boost to the country, according to the ESRI.<\/p>\n

In its latest Quarterly Economic Commentary, the institute forecasts modified domestic demand (MDD), a measure designed to give a clearer picture of the domestic economy, will grow by 2.6% this year and 3.4% in 2027.<\/p>\n

However, inflation is expected to remain elevated at 3.6% this year and 3.3% next year, with Ireland particularly exposed to international oil and gas prices because of its reliance on imported fossil fuels.\u00a0<\/p>\n

The ESRI describes Ireland as being caught between two international economic \u201ccross currents\u201d: disruption to global energy markets caused by the conflict in the Middle East, and a rapid increase in investment associated with AI.<\/p>\n

It said damage to energy infrastructure and disruption around key shipping routes have driven up oil and gas price expectations, with those costs feeding through to Irish households and businesses.\u00a0<\/p>\n

The warning comes as Irish consumers are already facing renewed energy pressures.<\/p>\n

Wholesale electricity prices in August were 77% higher than a year earlier<\/a>, while major suppliers have increased household gas and electricity prices by roughly 8% to 11% since March.\u00a0<\/p>\n

On the other hand, the ESRI said Ireland is well-placed to benefit from the enormous sums being invested internationally in the infrastructure needed for AI.<\/p>\n

\u201cInvestments globally in the software, hardware and energy production necessary to drive the AI-economy are likely to benefit open, globally connected economies like Ireland,\u201d the report said.<\/p>\n

\u201cWe are seeing the early signs of this in both investment and export data, and we expect this to contribute to growth over the period ahead.\u00a0<\/p>\n

\u201cWe appear to be favourably positioned to gain from the AI-related activities while also continuing to maintain a relatively robust export level in pharmaceuticals in the short term,\u201d the report added.<\/p>\n

Computer services exports have continued to increase, while more than \u20ac7 billion of the rise in non-pharmaceutical goods exports during the first half of this year came from electrical machinery and automatic data-processing equipment.<\/p>\n

The ESRI said this suggested Irish-based exporters may be well positioned to benefit from continued data-centre investment.<\/p>\n

However, the continued expansion of data centres has prompted concerns over their impact on Ireland\u2019s energy system, with the facilities accounting for 22% of national electricity grid demand in 2024.<\/p>\n

More than \u20ac214 million was separately invested in Irish AI companies during the first half of 2026, according to research published last month, amid record global investment in the technology.\u00a0<\/p>\n

But the ESRI cautioned that the AI boom also increases Ireland\u2019s exposure to a relatively small number of major multinational companies.<\/p>\n

It warned that a correction could pose risks to economic output, employment and the public finances if heavy AI investment fails to produce the returns companies expect.\u00a0<\/p>\n

Elsewhere, the institute forecasts 39,200 new homes will be completed this year and just under 40,500 in 2027, but warned that the continued lack of a substantial increase in planning permissions presents a weakness over the medium term.<\/p>\n

The forecasts also leave housing output well below the government\u2019s target of delivering more than 50,000 new homes annually by the end of the decade.<\/p>\n","protected":false},"excerpt":{"rendered":"IRELAND\u2019S ECONOMY IS expected to continue growing despite higher energy costs, with booming global investment in artificial intelligence…\n","protected":false},"author":2,"featured_media":639310,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[220,218,271530,72,943,271531,98091,113,5485,25744,61,60,231283],"class_list":["post-639309","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ai","tag-artificial-intelligence","tag-boom-and-gloom","tag-business","tag-cost-of-living","tag-crossed-wires","tag-economic-and-social-research-institute","tag-economy","tag-energy-costs","tag-esri","tag-ie","tag-ireland","tag-power-struggle"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/639309","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=639309"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/639309\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/639310"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=639309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=639309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=639309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}