Ireland is pushing up European economic growth and is the main driver of a better than expected forecast for the Eurozone, the International Monetary Fund (IMF) says in its global update.
Eurozone growth is now expected “to accelerate to 1.0 percent in 2025 and to 1.2 percent in 2026.”
That’s up from 0.8 percent for this year that the IMF was forecasting back in April.
“It is largely driven by the strong GDP outturn in Ireland in the first quarter of the year, although Ireland represents less than 5 percent of euro area GDP.
The upward revision for 2025 reflects a historically large increase in Irish pharmaceutical exports to the United States resulting from front-loading and the opening of new production facilities.
Without Ireland, the revision would be only 0.1 percentage point.”
The IMF’s World Economic Outlook warns of both “tenuous resilience amid persistent uncertainty”.
It says US tariffs have not turned out to be as bad as had been expected back in April.
That’s because Donald Trump has made deals which – though bad for the economy – has set tariffs at lower levels than he had orginally threatened.
That includes a 15 percent tariff on most EU goods, down from a threat of 20 to 30 percent.
The IMF says tariffs will still weigh on growth.