Ireland’s economy is showing “remarkable momentum and resilience” despite global uncertainty, according to the latest economic outlook from business group Ibec.
The employers’ organisation said domestic investment and consumer demand have remained strong this year, even as the international trading environment faces mounting pressures. However, Ibec cautioned that challenges loom, pointing to a slowing global economy, geopolitical instability and volatile markets.
Ibec expects the weaker global environment to weigh on Ireland’s growth in late 2025 and into 2026, particularly as changes in global trade patterns impact exports and investment. Even so, the group projects solid expansion, forecasting domestic demand growth of 3% in 2025 and 2.6% in 2026. The latter figure represents an upgrade on its earlier forecast.
Consumer spending is set to rise by 2.8% this year before easing to 2.4% in 2026, while investment is projected to expand by 3.4% in 2025 and 2.2% in 2026. Employment, which has grown at a “remarkable” pace in recent years, is expected to slow, with job growth dipping below 2% next year.
At the headline level, Ibec forecasts gross domestic product (GDP) will grow by 6% in 2025, before moderating to 4.1% in 2026.
Gerard Brady, Ibec’s head of national policy and chief economist, said the economy’s current performance remains strong, with “all indicators pointing to continued resilience.” He noted that “domestic investment has broadly held up, consumer spending has grown at a steady pace, and employment has continued to expand.”
However, Brady said early signs of a slowdown are emerging, particularly in the labour market. “We are starting to see early signs of softening in some labour market indicators, including our own member surveys which indicate slower hiring,” he added.
The group warned that while Ireland’s public finances are currently robust, they remain highly vulnerable to global volatility. Brady said fiscal policy should prioritise building sustainability. “Fiscal management must therefore focus on restoring a sustainable balance between income and expenditure over the coming years, excluding excess corporate tax receipts that exceed levels typical in comparable globalised economies,” he said.
Despite the risks, Ibec also pointed to significant opportunities ahead, particularly in the digital and artificial intelligence revolutions, which could provide long-term growth and investment potential.
Overall, Ibec’s outlook underlines a mixed picture for Ireland: a resilient domestic economy supported by strong spending and investment, but one increasingly exposed to headwinds from a slowing global economy and shifting trade conditions.
