DAVY VIEW

Close to our forecast, the real Irish economy grew strongly by nearly 5% in 2024. Driven by very favourable fundamentals, especially in terms of employment growth, we see scope for continued expansions above 4% a year and extend our forecast horizon to 2027. The fiscal position remains strong, although we have revised our forecasts for housing output somewhat lower. While US tariffs and high uncertainty remain short-term risks to the outlook, the main impact we expect is lower corporation tax receipts later this decade. Into the 2030s, we note a trend towards increased “geo-economic fragmentation” and what it means for Ireland’s economic model – in particular, the imperative to address long-standing shortfalls of housing and infrastructure.