Business group Ibec has called on the Irish Government to take a “sensible and prudent” approach in Budget 2026, warning that global economic uncertainty and growing trade tensions threaten Ireland’s competitiveness.
Launching its pre-budget submission on Monday, Ibec urged a “measured and strategic” fiscal plan focused on long-term resilience, productivity, and competitiveness rather than short-term gains.
Amid heightened concern over global tariff risks, Ibec stressed that persistent or emerging trade barriers pose a serious threat to Ireland’s export-reliant economy. “Some sectors will suffer significant and lasting damage to competitiveness,” the group said, adding that targeted supports for affected industries and workers—such as adjustments to PRSI and trade aid—are urgently needed.
Ibec’s Chief Economist and Head of National Policy, Gerard Brady, said Budget 2026 must be framed with a clear eye on the global landscape, particularly in light of recent U.S. tax reforms and intensifying trade frictions. “We need to make the right choices to safeguard our competitiveness and ability to attract and retain business,” Brady said.
He highlighted the importance of investing in productivity-focused areas, including infrastructure, and urged the Government to stick to its capital spending plans under the National Development Plan, regardless of economic headwinds. “Public investment should be prioritised above all other fiscal commitments,” he said.
Ibec has proposed a €3 billion budget package, including €1.3 billion in new infrastructure spending. The group also emphasised the need to address Ireland’s high cost of doing business and called for greater focus on skills development and innovation.
Brady noted that Ireland is still falling short of its potential as an innovation leader, urging reform of the National Training Fund to support workforce upskilling—particularly in response to transformative technologies such as artificial intelligence. He also called for a broader and enhanced R&D tax credit, to include areas such as process innovation, AI, and green technologies.
“This would make Ireland a more attractive location for both indigenous businesses and multinational investors,” he said. He added that changes could take effect from January 1 and would deliver immediate benefits.
Meanwhile, Ibec’s Executive Director of Lobbying and Influence, Fergal O’Brien, warned that the threat of a global trade war is weighing heavily on the Irish economy. “Budget 2026 is going to be predominantly about the stress and pressure in our traded economy,” he said.
O’Brien singled out the current 10% tariff rate as particularly damaging to low-margin sectors like food and drink, and warned that if threatened 30% tariffs materialise, the impact would be “extremely damaging.” He also voiced concern over potential EU countermeasures.
“The current situation is already difficult,” he said. “If the trade war escalates, Ireland’s economic model—built on open, rules-based international trade—will come under serious strain.”
