The International Monetary Fund has revised down its economic growth forecast for Ireland.
The IMF now expects Ireland’s economy to shrink slightly, by 0.2 percent, this year, before returning to growth in 2025.
But growth next year and in 2026 will be lower than previously estimated, according to its latest analysis.
The IMF now expects the Irish economy to grow by 2.2 percent in 2025 and by 2.4 percent in 2026, down 0.3 percent and 0.1 percent respectively.
The IMF report on Europe’s economy suggests that an economic recovery is underway across the continent.
Growth has been bolstered by “strong crisis responses”, the IMF says. But potential has been hampered by “persistent core inflation, shifting economic policies, and geopolitical tensions.”
The IMF’s outlook for 2024 and 2025 predicts modest growth rates of 1.0 percent and 1.4 percent for Europe’s advanced economies. Poorer parts of eastern and central Europe are expected to recover more strongly.
The European Central Bank is expected to continue easing interest rates in the coming months. Inflation is predicted to continue to fall, both in Ireland and Europe wide.
The IMF advises governments and central banks to use the improved outlook to “rebuild buffers and secure debt sustainability” to be able to prepare future economic shocks.