The domestic economy could expand by just over 2% annually over the next decade, according to a projection by the Economic and Social Research Institute.<\/p>\n
The new study also examines how Ireland would respond to potential shocks.<\/p>\n
It said Ireland’s economy successfully weathered the negative effects of Brexit, Covid-19 and energy price spikes.<\/p>\n
But it adds the country is highly vulnerable to external risks from a “pessimistic global economic environment” driven by changing US trade policy and global uncertainty.<\/p>\n
It said Ireland\u2019s reliance on multinationals for employment and corporate tax revenue is the main driver behind the potential threats.<\/p>\n
Its main assumption is that the domestic economy will grow by 2.3% annually until 2030 and by 2.1% in the five years until 2035.<\/p>\n
The ESRI has said its Economic Outlook is not an economic forecast but is a projection before the effects of any shocks to the economy are taken into account.<\/p>\n
The report analyses how Ireland might be affected in a range of different scenarios.<\/p>\n
It said that in the event of global slowdown, a 5% drop in export demand for Irish commodities could reduce the country\u2019s national income by 3.2% and hit consumer spending by 6.4% by 2030.<\/p>\n
The study said a loss in competitiveness could see a 5% fall in incomes and an 8.6% fall in consumer spending.<\/p>\n
It also models the effect of a drop in foreign direct investment.<\/p>\n