The Economic and Social Research Institute (ESRI) has lowered its forecast for domestic economic growth and housing construction in 2024, citing infrastructure bottlenecks, financing difficulties, and labour shortages. The move follows a similar downgrade from the Central Bank last week, raising fresh concerns over Ireland’s economic resilience amid global uncertainty.
In its latest report, the ESRI now expects just 33,000 new homes to be built this year—1,000 fewer than previously forecast, and well below the Government’s target of 41,000. With the housing need estimated at over 50,000 units annually, the figures highlight a growing gap between demand and supply.
Finance Minister Paschal Donohoe, speaking on RTÉ’s Morning Ireland, acknowledged the scale of the challenge but defended the Government’s long-term housing plan. “A pledge to build 300,000 homes during the lifetime of this Government is doable, but it will be demanding,” he said, pointing to pressures on energy, water, and planning infrastructure.
The ESRI also revised its forecast for modified domestic demand (a key measure of economic activity) downward—from 3% to 2.3%. General global uncertainty, weaker investment appetite, and more cautious consumer behaviour were cited as contributing factors.
Alan Barrett, ESRI Director, warned of growing risks tied to Ireland’s overreliance on corporate tax receipts from multinationals. “While headline public finance figures appear healthy, Ireland is running a fiscal deficit once windfall revenues are excluded, which appears risky,” he said.
Still, the ESRI expects Ireland’s GDP—boosted by multinational activity—to grow 4.6% in 2024 and 2.9% in 2025, with strong export performance projected.
The country’s vulnerability to international developments, particularly in the U.S., remains a concern. Associate Research Professor Dr Conor O’Toole said Ireland’s reliance on American trade “creates challenges” at a time of heightened geopolitical and economic uncertainty. “There’s an incredible amount of volatility at the moment in both the domestic and global economy,” he added.
Regarding potential U.S. tariffs on pharmaceuticals, Minister Donohoe said the Government is engaging with the European Commission to make the case for safeguarding international supply chains. “We don’t yet know the outcome of the U.S. review,” he said.
On public spending, Donohoe emphasized that future budgets will need to be more targeted. “We won’t see large-scale inflation-era measures again,” he said, adding that support will continue through “carefully designed” interventions in upcoming budgets.
As Ireland braces for global headwinds and domestic constraints, the ESRI’s latest findings underscore the need for structural reform and policy resilience.
