DAVY VIEW

The Irish economy began 2025 in good shape. Tailwinds from strong labour demand have been helped along by lower interest rates and a decline in headline inflation, which remains the lowest in the euro area. Exchequer returns for January show continued growth in non-corporation taxes, growing close to 7% in annual terms. Within this, VAT receipts (relating to the important Christmas trading period) were strong. This aligns with the Central Bank of Ireland’s card spending and ATM withdrawals data for December, also published this week. Taken together, these indicators augur well for consumer spending in 2025.