International events are “clouding the outlook” for the Irish economy, the Economic and Social Research Institute (ESRI) has warned.
“While the Irish domestic economy appears to be in a relatively robust state, notable international and domestic risks are clouding the outlook. Global uncertainty has risen to very elevated levels given the fallout from changing US trade policy and geo-political developments”, the insititue says.
“This increase in uncertainty is likely to weigh on investment and consumer spending.”
Until now, the impact of Trump tariffs has been muted because pharmaceuticals has so far not been hit with tariffs,
“Ireland has been insulated somewhat, up to now, because of the exclusion of pharmaceutical goods. In addition, the relative importance of services in total Irish exports provides short-term protection from tariff impacts but raises concerns about non-tariff barriers to services trade being imposed in future US-EU negotiations”, ESRI says.
The Economic and Social Research Institute now forecasts Modified Domestic Demand (MDD) growth of 2.3 percent in 2025 and 2.8 per cent in 2026.
MDD is an alternative measure of economic growth to GDP. It calculates total spending within the country, excluding the impact of certain multinational activities which might give a false impression of the state of the Irish economy.