Quarterly Bulletin No. 3 2026

Comment

Pronounced structural changes continue to exert an influence on the global economy and Ireland, intersecting with regular business cycle conditions. Trade tensions remain high and firms are adjusting to a fragmented and less favourable trading environment than existed for much of the recent past. Added to this – and reflective of a more volatile geopolitical environment – the Iran-US war led to a renewed surge in global energy prices, reigniting pressures that had only recently subsided following Russia’s invasion of Ukraine. Across Europe, the summer period saw record temperatures and prolonged drought, occurrences made far more likely as a result of the effects of climate change. This has placed strain on food production and transportation, adding a further impetus to already high inflation. Closer to home, the labour market is experiencing structural shifts, including adoption of new technologies, continued ageing of the population and the increasingly important role of net inward migration – already accounting for around two-thirds of employment growth. In the face of these significant structural forces, the economy has displayed impressive resilience to date, but careful policy choices and long-term planning will be needed to sustain steady economic growth and low unemployment, reduce inflation and improve the underlying health of the public finances.

Annual National Accounts data published by the CSO in July confirm the economy’s continued rapid growth in the post-pandemic period. The economy, as measured by real modified Gross National Income (GNI*), grew by 4.7 per cent last year. Since 2021, annual average growth in real GNI* of 5.5 per cent per annum has been recorded, well above the economy’s estimated potential growth rate. The rapid pace of growth means that the overall size of the economy – based on GNI* in real terms – increased by 35 per cent or €89 billion between 2019 and 2025. The growth in the economy has delivered employment growth, higher incomes and increased government revenue. New analysis published in this Bulletin confirms the increasing importance of the multinational sector to Ireland’s economic performance as measured by GNI* (Box A). Although labour and other income derived from domestic sources accounts for the majority of real GNI*, the contribution of MNEs (including MNE corporation tax, wages and other related income) has increased substantially over time – from 16 per cent in 2013 to 26 per cent in 2025.

The most recent data confirm that the positive momentum in economic activity from 2025 has carried over into the first half of 2026, but with significant differences in the pace of activity occurring across different parts of the economy. Even with higher inflation, consumer spending continues to grow steadily. MNE-related investment is providing a significant stimulus to overall modified domestic demand (MDD). The profile of the latter is uneven in the quarterly data but a clear underlying trend is evident with the level of machinery and equipment investment having risen in real terms by over one third in just three years. Substantial increases in spending on AI-related and data-centre hardware by multinational firms in Ireland is underpinning the growth in this component of investment, which has a large import share. These imports are included in MDD which is currently at the upper end of the range of estimates of domestic growth at just over 3 per cent in the first half of 2026. Other measures, such as output of the domestically-dominated sectors, show a slower pace of growth currently of around 2 per cent.

Looking ahead, this pattern seems likely to hold over the forecast years with MDD expected to grow at a slightly higher annual average rate of 3.5 per cent, compared to growth in GNI* of 3.1 per cent – the latter being close to the economy’s estimated long-run potential. Assuming inflation moderates to close to 2 per cent by 2028 in line with the forecasts in this Bulletin, steady growth in consumer spending will be supported by modest real income gains from 2027 and the buffer provided by the high level of household savings. Inflation forecasts are broadly unchanged from the previous Bulletin (June) but uncertainty around these baseline projections is exceptionally high with risks broadly balanced for growth and to the upside for inflation.

Along with increases in consumer spending, overall MDD is expected to be supported by a rise in investment out to 2028. While overall modified investment has been revised up in this Bulletin, the picture is somewhat mixed. The rise in demand for software and equipment linked to the growth in AI should support increases in MNE-led investment in the coming years. There is the potential for stronger growth in this component over the short term beyond the baseline projections, should global demand remain high. In relation to housing output, there has been a welcome rise in residential construction activity with housing completions more than doubling between 2017 and 2025. Further increases in housing output are expected out to 2028 but this rests on achieving progress across several dimensions that influence the delivery of housing. Signals from housing commencements continue to be difficult to interpret, given the policy-induced surge in 2024. This has been followed by a fall in commencements in 2025 and 2026, while annual planning permissions have remained broadly stable in the mid-30,000s. Moreover, analysis in this Bulletin shows that for a given pipeline of housing activity currently (already approved or commenced dwellings), the average duration from the initial lodgement of planning application to completion is four years, twice as long as a decade ago (Box B). These considerations weigh on the overall outlook for housing completions and emphasise the importance of timely implementation of reforms to speed up the delivery of key national infrastructure, including those in the Accelerating Infrastructure and Action Plan. These reforms, if actioned in an effective and timely manner and combined with measures to increase productivity, should facilitate the delivery of increased housing supply outlined in our central forecast.

Beyond housing, recent data illustrate the gap between the growth in the economy, employment and the population and the State’s infrastructure more broadly. The population increased by just under 67,000 to an estimated 5.52 million in the year to April 2026. With the natural increase in the population slowing, net inward migration accounted for almost three-quarters of the increase in the overall population and is playing an increasingly important role in boosting labour supply and employment, with much of the latter in high skilled occupations. Although employment growth is forecast to slow out to 2028, migration will remain a critical structural component for increasing labour supply, absorbing macroeconomic shocks and sustaining economic growth.

Higher energy prices have added significantly to headline inflation in 2026 as the Iran-US war has pushed up international energy prices. Along with these externally determined price pressures, services inflation remains elevated. This partly reflects the pass-through of higher input costs but also continued domestic demand and wage pressures. The key risk is the potential for second-round effects to emerge, whereby workers seek compensation for real wage erosion through higher nominal wage demands, and firms pass these higher labour costs through to consumer prices so as to maintain profit margins. While there is no evidence of widespread second-round effects occurring to date, these would take longer to emerge and the risk remains significant, particularly if the energy shock proves more persistent or if the conflict escalates further.

At the euro area level, monetary policy has responded to heightened inflationary pressures to ensure euro area inflation stabilises sustainably at the 2 per cent medium-term target. On 10 September, the Governing Council raised the three key ECB interest rates by 25 basis points, following a similar increase in June 2026. The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period. The Governing Council’s deliberations remain data-dependent, with the Council continuing to assess incoming information on a meeting-by-meeting basis. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook, the risks surrounding it and the strength of monetary policy transmission.

For a small open economy such as Ireland, fiscal policy has a key role to play in delivering sustainable economic growth and low inflation over the medium term. To achieve this, the fiscal stance should be countercyclical, i.e. it should support the economy when it is operating below its sustainable potential (i.e. when unemployment is high) and conversely, it should reduce demand when the economy is operating above its sustainable potential and excessive inflationary risks are present. Current and projected economic and labour market conditions indicate that the economy does not require additional budgetary stimulus at present. A benefit of pursuing a countercyclical policy stance in the present economic conditions is that larger fiscal buffers could be accumulated, which could then be deployed when a downturn in economic activity occurs and unemployment rises.

With inflation already above 3 per cent and with the balance of risks to the central forecast to the upside, pursuing a countercyclical budgetary stance would also guard against further aggravating price pressures in the economy. In addition to substantial budget day allocations, expenditure overruns (relative to initial Government plans) have been commonplace in recent years, providing additional stimulus to the economy. As analysis shows, continued spending overruns in line with post-2021 growth rates would add approximately 1 per cent to the price level by decade's end.^[1]

The unchanged spending ceilings in the Summer Economic Statement (compared to the April 2026 Annual Progress Report) should be preserved for Budget 2027 to limit fiscal exposure to potentially transitory corporation tax receipts, concentrated among a small number of multinational firms.

Maximising the delivery of new public infrastructure to address known deficits in key national infrastructure and crowd in higher private investment will boost the economy’s long-run growth potential. Investment targeted at accelerating the decarbonisation of the economy would help reduce exposure to volatile imported fossil fuel prices (including as a result of geopolitical shocks) and support a more stable cost of energy for Irish households and businesses. These actions would also contribute to achieving emission reduction targets, that are at present being missed.

This would mark a more sustainable response to the current high inflation environment than largely untargeted excise cuts on fuels which affect price signals and risk an unwanted further narrowing of the tax base. For households particularly exposed to the effects of higher energy prices, temporary and targeted measures can protect the most vulnerable while still ensuring that the overall budgetary stance builds resilience in the public finances.

Outlook for the Irish Economy

Recent Developments and Forecast Summary

Economic activity (Modified Domestic Demand - MDD) expanded by 1.7 per cent year-on-year in Q2 2026, down from 4.5 per cent in Q1 (Figure 1). Modified investment increased by 1.4 per cent year-on-year, with multinational-dominated modified machinery and equipment up 24 per cent, reflecting substantial AI-related and data-centre hardware investment. This marks a continuation of a trend evident since 2023 when this activity began to rise sharply. Domestic building and construction investment contracted by 6.9 per cent year-on-year in Q2 2026, driven by weakness in non-residential building and construction. Consumption expanded by 2.9 per cent year-on-year, carrying more momentum into 2026 than forecast in the previous Bulletin. Other domestically-oriented indicators of activity also point to growth in Q2. Non-corporation tax revenue was robust in the first eight months of the year, with income tax and VAT receipts showing strong increases, while output of domestically-oriented sectors increased by 1.8 per cent year on year in Q2. The Central Bank's Business Cycle Indicator (BCI) summarises the information from the latest high-frequency monthly data, separating out the underlying trend in activity from movements due to noise. The BCI suggests that the domestic economy is growing at around its long-run average rate after recovering from a notable weakening in March and April (Figure 2). The uptick in July is broad-based with only labour market data contributing slightly negatively.

GDP rebounded with 10.2 per cent quarter-on-quarter growth in Q2 2026 following a contraction of 7.8 per cent in Q1. Following a 9.5 per cent decline in Q1, overall exports increased by 17.1 per cent, with goods exports increasing by 39.3 per cent and services exports by 3.4 per cent. Imports grew by 4 per cent, led by AI-related goods and service royalties and licenses largely paid to foreign multinationals. The first half of this year saw GDP decline by 7 per cent compared with the corresponding period last year, with exports broadly unchanged and imports 6.5 per cent higher. The Q2 recovery in GDP, therefore, reflects substantial volatility in multinational activity occurring alongside a more moderate expansion in the domestic economy (Figure 3).

Annual National Accounts revisions released in July show that wages recovered to their pre-pandemic level earlier than reported in previous data, with households saving a considerably higher share of income. Revisions to Compensation of Employees in the Annual National Accounts resulted in significant upward adjustments to nominal wages backdated to 2021, with consumption revised down. Overall, average real compensation per employee for 2025 has been revised up from equalling pre-pandemic (2019) levels in the initial data to now being 2.5 per cent above (Figure 4). Similarly, real gross disposable income per household has been revised upwards across several years with data for 2025 now 6.4 per cent higher than before the revision and 6.8 per cent higher than in 2019. An important implication is that the wage catch-up which followed the inflationary surge of 2022 occurred earlier than indicated in previous data. The combination of an upward revision to household incomes and a downward revision to consumption means that the implied household savings ratio rose sharply for the period 2023-25 in the revised data. For 2025, the ratio was revised up from 12.9 per cent to 19.9 per cent (Figure 5), putting the Irish households' savings rate at the top of the euro area (Figure 13).

According to flash estimates, headline HICP inflation reached 3.4 per cent in August 2026, with services remaining a persistent source of price pressures while energy contributions have moderated. In July's full release, headline HICP inflation was 3.1 per cent year-on-year, with core inflation remaining stable at 3.2 per cent (Figure 6). The composition of inflationary pressures has continued to shift, with the contribution of energy to headline inflation roughly halving between April and July, before picking up again in August. While liquid fuel prices have moderated somewhat in recent months, the data for July saw an increase in electricity prices alongside a moderate rise in gas prices (Figure 7). Services have remained a persistent source of price pressures, continuing to add close to 2 percentage points to the headline rate during 2026. Non-energy industrial goods inflation stood at an average of 1 per cent in the first half of 2026, largely shaped by methodological revisions discussed in Box D of QB1 2026.

In the face of ongoing inflationary pressures, modified domestic demand is projected to continue expanding, supported by modified investment and steady consumption growth. The central forecast is based on an assumed market-implied path for oil and gas futures prices as of mid-August 2026. While these assumptions for oil prices have been revised down since the last Bulletin, wholesale electricity price projections have been revised up significantly. This in part reflects the impact of earlier rises in oil and gas prices. Headline inflation is projected to average 3.4 per cent in 2026, moderating to 3.1 per cent in 2027 and 2.0 per cent in 2028. This represents a slight downward revision for 2026 relative to the QB2 projections, but an upward revision in 2027. In the light of a strong Q2 outturn, and the strength of high-frequency indicators, the outlook for consumption has improved slightly relative to the previous Bulletin. Modified investment is expected to continue building on the strong momentum from 2025 and the first half of 2026. AI and data-centre related investments, in particular, are expected to continue to play an important role, as evidenced by the continued strong growth in AI-related imports. A stronger outlook for machinery and equipment investment offsets weaker projections for non-residential building and housing completions than in the previous Bulletin. The latter are revised down slightly based on more subdued data for key leading indicators of housing output since QB2 as well as new information pointing to a lengthening in the typical duration of the housing completion process. The net result is that overall MDD growth is being revised up modestly in 2026 and 2027, to 3.8 and 3.4 per cent, respectively (Figure 8). The central projections are sensitive to the assumed path of energy prices and realised outturns on investment and imports of AI and data-centre related capital goods, which are both subject to significant uncertainty, as discussed in the Balance of Risks.

Growth in imports is projected to outpace that of exports in 2026, leaving net trade contributing negatively to GDP growth, before recovering in 2027 and 2028. Real exports of goods and services are projected to grow by 1.2 per cent in 2026, 6.6 per cent in 2027 and 5.7 per cent in 2028. Real imports are projected to increase by 5.2 per cent in 2026, supported by strong AI-related goods imports and imports of royalties and licenses - both of which showed very strong growth over the first half of this year. Combined with the outlook for domestic demand, this underpins the forecast for growth in real modified national income (GNI) of 3.1 per cent per annum on average from 2026 to 2028, slightly below the average expected growth in MDD over the same period (Table 1). The modified current account is expected to remain in surplus over the forecast horizon, projected to average 5.8 per cent of nominal GNI*.

Risks to the growth outlook are balanced, with upside risks to investment and consumption offsetting downside risks related to continued geopolitical tensions in the Middle East. The balance of risks to the inflation outlook is primarily to the upside, with the main risk stemming from a further prolongation of geopolitical tensions in the Middle East. Further increases in oil and gas prices could generate spillover effects into other components of inflation, beyond what is currently incorporated in the projections and, coupled with potential second-round effects from wage adjustments, risk adding further upward pressure to prices. The balance of risks to the export forecast is to the downside given the high level of concentration in pharma and ICT exports, with pharmaceutical demand, the location of production and the timing of multinational transactions presenting both upside and downside risks. AI-related developments are likely to have a meaningful impact on the economy over both the short and medium term. The magnitude and nature of these changes are highly uncertain. In the short term, risks to activity are tilted to the upside on the basis of the strength of AI capital expenditure, somewhat offset by downside risks from potential equity market adjustments and labour market effects. The resilience of private consumption in the face of the recent rise in inflation is an additional source of upside risk. In the light of population growth being at the high end of previous CSO long-term projections and with economic growth forecast to continue, capacity constraints could become worse if progress on alleviating infrastructure gaps in the economy is delayed or inadequate. This is particularly the case for housing output, where improvements in the timing of infrastructure delivery, particularly water and metered electricity connections, are needed. Government expenditure growth is running well in excess of the growth in tax revenue when excess corporation tax is excluded, presenting a material downside risk to the public finances (see Balance of Risks to the Outlook).

Table 1: QB3 September 2026 Forecast Summary and Revisions from June 2026 Baseline Projections

Forecast Detail

External Environment

With renewed escalation of the US-Iran conflict arising, elevated oil and gas prices continue to disrupt the world economy. Up to recently, energy prices had stabilised somewhat compared to the initial stages of the conflict, owing to a fragile ceasefire. However, as the ceasefire has now expired, and following renewed military escalation, oil and gas prices have been rising again, with oil prices breaking the $100 mark in early September. In response to the increase in energy prices, and the inflation outlook, a number of major central banks have reacted by raising policy interest rates. Across the world, the effects of the conflict vary, with energy importers (including the euro area and Japan) and emerging markets being the most affected. The July 2026 update to the IMF World Economic Outlook expects global GDP growth of 3.0 per cent in 2026 (3.4 per cent in 2027), down from 3.5 per cent last year, reflecting the impact of the conflict. Given the worldwide effects of elevated energy prices, global inflation is also projected to rise this year to 4.7 per cent, stalling the global process of disinflation that was underway before the conflict. Long-term bond yields have also been rising throughout advanced economies, most notably in the US and Japan, as high public debt levels meet with rising inflation and policy rate expectations and uncertain long-term growth outlooks.

Against the backdrop of the energy shock, output growth remains steady but fragile in major economies. US GDP grew at an annualised quarterly rate of 1.5 per cent (0.4 per cent quarter-on-quarter) in the second quarter. Despite the erosion in real income growth due to the recent conflict-related rise in inflation, consumer demand (contributing 2.3 percentage points to growth) remains strong. It has been partly supported by a buoyant stock market, reflecting optimism surrounding AI investment, which has also been driving demand, and strong company earnings. The euro area economy grew by 0.6 per cent in Q2 2026, rebounding from a flat first quarter (which partly reflected volatility in Irish GDP data) and demonstrating resilience in the face of multiple shocks. In year-on-year terms, euro area GDP grew by 1.2 per cent, while employment rose by 0.5 per cent. At the EU level, output per person employed rose by 0.9 per cent annually in Q2, in part reflecting a cyclical recovery. The relatively low growth in productivity in the euro area is a longer-term vulnerability, alongside demographic changes and competitive pressures. The Chinese economy grew by 4.3 per cent year-on-year in Q2 2026, down from 5.0 per cent in the previous quarter and falling short of the target range of 4.5 to 5 per cent GDP growth for the year. The economy continues to be characterised by a heavy reliance on foreign demand, as stagnant domestic demand (with retail sales growing by only 0.6 per cent year-on-year in July) is balanced by persistent strength in external trade. Strong export growth (in particular, of high-tech goods exports) is supporting manufacturing production, while the weakness in domestic demand is, in large part, owing to a prolonged slump in property prices that is affecting households' balance sheets and confidence.

In September, the ECB macroeconomic projections for the euro area were revised up for both inflation and growth. In the baseline projections, euro area inflation is forecast to average 3.0 per cent in 2026, 2.5 per cent in 2027 and 2.1 per cent in 2028, driven by higher commodity prices. Reflecting greater than expected resilience in the euro area economy, the projections see euro area GDP growing by 0.9, 1.4 and 1.5 per cent, respectively, in the same years. At its September meeting, the Governing Council of the European Central Bank, recognising the inflationary pressures generated by the conflict in the Middle East, decided to raise the key ECB interest rates by 25 basis points, bringing the interest rate on the deposit facility rate (DFR) to 2.50 per cent. The DFR was last raised to 2.25 per cent in June 2026, in response to the energy price shock. With these policy decisions, the Governing Council noted it is well-positioned to navigate the highly uncertain outlook created by the conflict; it is not pre-committing to any particular interest rate path and maintains a data-dependent approach to monetary policy.

Economic Activity

Consumption is forecast to grow by 2.1 per cent in 2026 and 2.2 per cent in 2027 before easing to 2.1 per cent in 2028, marking an upward revision for 2026 from 1.8 per cent in the previous Bulletin. A small part of the 2026 uplift in the forecast is a mechanical adjustment resulting from the CSO's July Annual National Accounts revisions to historical data (Figure 9). This arises because the revisions lowered consumption in 2025, thereby mechanically increasing the growth rate for 2026. Recent outturns for 2026 and high-frequency indicators show that, despite inflationary headwinds, spending has been resilient. The sharp fall in consumer confidence that followed the US invasion of Iran has largely unwound, with Irish consumer confidence recovering to -19.6 in August from a trough of -28.6 in April, closing most of the gap to the euro area value (Figure 10). Population growth also continues to support aggregate consumption, with population levels increasing by 1.2 per cent in the twelve months to April 2026. Over the forecast horizon, consumption growth is expected to be supported by continued employment growth and modest real income gains.

The latest National Accounts confirm that consumption continued to expand in Q2 2026, consistent with resilient high-frequency spending indicators. Real household consumption increased by 2.9 per cent year-on-year and by 1.0 per cent quarter-on-quarter in Q2. Growth in nominal spending using bank cards slowed from around 10.5 per cent in 2025 to 6.9 per cent in the year to Q2 2026 (Figure 11). Within the card data, Q2 growth was broad-based, with groceries growing by around 5 per cent in volume terms, while durables and electrical goods grew by 12 and 24 per cent, respectively. HICP-deflated card spending grew by 3.4 per cent year-on-year in Q2, down from 6 per cent in Q1, while retail volumes excluding motor trades were broadly flat. More recent retail sales data point to continued spending growth into Q3, with July volumes up 1.3 per cent on the month and 2.2 per cent year-on-year. Exchequer VAT receipts increased by 7.3 per cent in the first eight months of the year (Figure 12). Taken together, these indicators suggest that consumption growth has remained solid in 2026 and is more resilient than previously expected.

The savings ratio is projected to remain elevated over the forecast horizon, with structural factors at play. The Institutional Sector Accounts revised up income and, combined with downward revisions to consumption in the Annual National Accounts, the savings ratio increased sharply for the period 2023-25 (Figure 13). The savings ratio for 2025 now stands at 19.9 per cent, up from 12.9 per cent prior to the revision. This reflects an increase in aggregate gross savings of €14.4bn to €38.4bn (+60.3 per cent) in 2025 compared with the previous data. CSOs provisional estimate for Q2 2026 puts the seasonally adjusted savings ratio at 19.9 per cent, up from 19.1 per cent in Q1, as income growth outpaced consumption. Ireland now has the highest household savings rate among reporting euro area countries. The euro area median for 2025 is 13.8 per cent among the eleven countries reporting so far, with Ireland ahead of Germany (19.9 versus 19.2 per cent). Of the roughly 20 per cent of income saved, about half is now used for housing investment, which includes dwellings and improvements. This stood at 10.3 per cent of income in 2025, more than double the 2019 share and the highest since 2008 (Figure 14). The remainder of household savings is used to accumulate financial assets such as deposits, pension contributions, insurance and stocks and bonds. Research shows that structural factors, including an ageing population and an increased propensity to save for housing among younger cohorts, alongside higher levels of uncertainty and precautionary savings motives have supported a gradual upward drift in the household savings ratio over recent years (Boyd, Byrne and McIndoe Calder, 2025) (PDF 1.05MB).

Forecasts for overall modified investment have been revised upwards from the previous Bulletin to an average of 6.7 per cent from 2026 to 2028, driven primarily by stronger multinational-dominated machinery and equipment spending. Recent trade data and a significant investment announcement by a major player in the ICT sector suggest that investment in modified machinery and equipment (M&E) is likely to be higher than previously anticipated. ^[2] Much of this investment is allied to a small number of large multinational enterprises (MNEs) in the ICT sector which is focussed on AI and data centre investments. Modified M&E is forecast to grow by an average of 12.3 per cent over the forecast horizon. Following strong growth in 2025, modified intangibles are also forecast to increase by an average of 6 per cent over the same period. However, these components of modified investment are dependent on the activities of a small number of large foreign-owned firms and are therefore particularly volatile in nature (Figure 15).

Housing completions are forecast to reach 39,500, 41,000 and 45,000 for 2026, 2027 and 2028, respectively, revised down slightly from the previous Bulletin and conditional on improvements in enabling infrastructure. For this year, while Q2 completions fell by 3.6 per cent year-on-year to 8,823 and the outturn was weaker than anticipated, growth in the second half of the year is likely to pick up as firms aim to meet the deadline for conditions set out in the development levy and Uisce Éireann rebate.^[3] While there have been over 100,000 commencements since 2024, the timing around housing and apartment delivery suggests that without further improvements in commencements and building time, current projections may be difficult to meet (Box B). Planning permissions have stagnated with an annual average of approximately 35,000 arising since 2023. Commencements amounted to approximately 16,000 units in H1 2026. This follows a surge in 2024 due to the expiry of energy and water connection waivers followed by very low levels throughout 2025 (Figure 16). The house price to cost index increased by 2.6 per cent in Q2 2026, improving viability of some schemes. However, longer building times and uncertainty around infrastructure means that some of the uncommenced permissions are unlikely to result in final completions in the timeline of the forecast horizon (Box A). Mortgage drawdowns for properties increased by 12.3 per cent year-on-year in the first half of 2026. The housing PMIs returned to positive territory in July 2026 having signalled a contraction in activity for the previous three months (Figure 17).

Machinery and equipment imports continued to rise strongly in Q2 2026. Their value increased by 56 per cent year on year, with office machinery and data-processing equipment accounting for over half of the increase. Imports of this equipment rose by 114 per cent, while imports of specialised machinery and telecommunications equipment increased by 128 per cent and 45 per cent, respectively (Figure 18). These developments are consistent with continued AI and data centre investment and the imports of the hardware typically used in them. However, not all such imports translate into domestic fixed investment, as some may be used as inputs into goods subsequently exported.

Bank lending to SMEs showed tentative signs of stabilisation in Q1 2026. Outstanding loans increased by 0.8 per cent over the quarter to €14.6 billion, although they remained 2.1 per cent below their level a year earlier. New drawdowns exceeded repayments, resulting in positive net lending of €100 million, with increases across both property-related and other SMEs (Figure 19). Gross new lending was also 12.8 per cent higher than Q1 2025. More recent data for non-financial corporations as a whole show positive bank lending of €479 million in July 2026. Non-bank lending remained concentrated on SMEs. In Q4 2025, the latest available period, non-bank new lending amounted to €858 million, down from €1.3 billion in Q4 2024. SMEs received 83 per cent of this lending, with general lenders and specialist property lenders providing similar amounts. Asset finance providers were the largest category of non-bank lender to large enterprises.

Annual National Accounts revisions had a substantial effect on nominal GDP and trade data for 2025, with implications for the outlook. The annual national accounts reduced 2025 nominal GDP by €36bn (down 5.7 per cent relative to the previous estimate), with 84 per cent of the revision arising from changes in net trade. Goods exports were revised down by €27bn while services exports were revised up by €17bn. Real export growth in 2025 is now measured at 7.5 per cent (goods 15.4 per cent, services 2.3 per cent) compared to 9.7 per cent prior to the revision. The revised levels and composition of trade provide a materially different starting point for the current projections. Notably, the goods-export revision largely came through 'other conceptual adjustments' in the balance of payments, which went from -€19bn to -€48bn. These adjustments reconcile customs-based merchandise trade with balance-of-payments concepts, particularly the change of economic ownership and market valuation. This category is expected to contribute positively to goods exports in 2026.

Exports of goods and services are forecast to grow by 1.2 per cent in 2026, 6.5 per cent in 2027 and 5.6 per cent in 2028, with services forecast to account for about 70 per cent of export growth in 2027 and 2028 (Figure 23). Despite strong growth in computer services, exports were relatively weak in the first half of 2026. Computer services are expected to continue their momentum in the second half of the year contributing to overall services growth in 2026 of 3.5 per cent, followed by a pick-up to 7.7 per cent in 2027 and 6.8 per cent in 2028. Tariff-related stockpiling in Q1 2025 was the main driver of the 20 per cent decline in goods exports in the year to Q1 2026, although Q2 saw a rebound with year-on-year growth of 17 per cent. In the second quarter cross-border customs exports contributed negatively to year-on-year growth, with positive contributions from offshore trade and, particularly, other conceptual adjustments (Figure 20). As discussed in more detail below, among other things, this category accounts for valuation fluctuations in cross-border trade. It was the primary contributor to negative trade revisions in the 2025 Annual National Accounts, and its recent fluctuations appear to reflect in part the value-volume disconnect in cross-border pharmaceuticals exports referenced in Quarterly Bulletin 2.^[4]

Cross-border customs goods exports remained substantially below 2025 levels in the first half of 2026, with the decline almost entirely attributable to lower pharmaceutical exports to the US, while exports of computer server equipment rose sharply. H1-2026 customs goods exports were 30.5 per cent lower than the same period in 2025, with the trade surplus falling by €54bn, of which pharmaceutical exports to the US accounted for €43bn (Figure 21). The fall in a specific category of pharma exports, polypeptide hormones (associated with weight-loss drugs), reflects low unit values rather than a halt in production volumes (Figure 22). Monthly polypeptide export values fell to around €20mn through Q4-2025 and have continued at similar levels over the first half of 2026 (H1 total €0.5bn versus €42bn in H1-2025). Physical export volumes (in KG weight) on the other hand have been comparable to 2025, resulting in a substantial fall in implied unit prices in recent months. Higher than average unit-values in 2025, followed by considerably lower than average unit-values in recent months are a likely contributor to recent offsetting fluctuations in other conceptual adjustments shown above (Figure 20), which could continue over the coming quarters. Exports of computer server equipment have risen sharply as Ireland is emerging as a major hub for such hardware. Exports of advanced data processing units (ADP) rose 155 per cent in H1 to €8.8bn and server/processing-unit exports rose seven-fold to €4.2bn, principally to Great Britain, the US, Canada and Norway.

Real imports of goods and services are projected to grow by 5.2 per cent in 2026 and to average 5.9 per cent over 2027 and 2028, driven by royalties and licenses paid to US MNEs and imports of data-centre hardware goods. AI/data-centre-related hardware imports continued to grow to record highs in Q2 2026. As shown in Figure 24, the AI-related goods import basket increased sharply in Q2 2026 reaching €7.7bn, about a fifth above its Q4-2025 peak led by core compute/micro-chips (€7.0bn). A second, distinct capital channel - semiconductor-manufacturing equipment imports - tripled to €1.2bn between H1 2026 and H1 2025. Services imports slowed in Q1 2026 in year-on-year terms due to the unwinding of an R&D/IP transaction that occurred in Q1 2025. Real services imports increased in Q2 by 12.8 per cent year-on-year, following a 5.4 per cent decline in Q1. Royalties and licenses, which now account for about 40 per cent of services imports (around 85 per cent of which come from the US) grew by 7.8 per cent in Q1 and 15.7 per cent in Q2 and are expected to continue to mirror growth in computer services exports.

Ireland's external position is expected to remain in surplus over the forecast horizon, with the modified current account projected to average around 5.8 per cent of GNI* through 2028. The modified current account (CA*), which adjusts the headline measure for distortions caused by globalisation-related flows of foreign-owned multinationals, is forecast to measure 6 per cent of GNI* in 2026, falling gradually to 5.6 per cent in 2028. This decline reflects our expectation that higher housing, infrastructure and business investment gradually absorbs more national saving, while continued robust household saving still maintains the sizeable surplus. The surplus in the headline current account is expected to increase in 2026, following an increase to 13 per cent of GDP in the first half of this year. The headline surplus is forecast to be 10.7 per cent of GDP in full-year 2026, declining to 9.7 per cent by 2028 due to continued strength in imports and persistent large outflows of multinational companies' profits (Figure 25).

Inflation

Headline Harmonised Index of Consumer Prices (HICP) inflation forecasts remain broadly consistent with those in the previous Bulletin, projected at 3.4 per cent in 2026 and 3.1 per cent and 2.0 per cent for 2027 and 2028, respectively (Figure 26 and Table 2). The slight downward revision for 2026 is largely attributable to the moderation in liquid fuel and food prices observed in the outturn data in recent months. Technical assumptions for energy prices now point to a marginally lower oil price trajectory relative to the previous Bulletin, partly offset by an upward revision to gas and wholesale electricity prices. While these divergent revisions to energy-related assumptions exert a marginal impact on the 2026 outlook, they constitute the main driver of the upward revision to the 2027 inflation forecast. Energy prices are projected to rise by 10.3 per cent in 2026, while non-energy industrial goods (NEIG) inflation continues to gain momentum on the back of this year's methodological changes. Rising NEIG price growth is consistent with the projected effects of measurement changes introduced by the CSO earlier this year, as detailed in Box D of QB1, with this component now contributing positively to inflation over the forecast horizon. Services inflation remains broadly in line with previous projections, at around 3.5 per cent throughout the forecast horizon. Underlying inflation measures have edged upwards, remaining above pre-pandemic levels (Figure 27).

Table 2: Inflation Projections

Source: CSO, Central Bank of Ireland.

Technical assumptions underlying the inflation forecasts have been revised since the previous Bulletin, with oil price projections revised down while wholesale electricity prices have been revised up significantly. The assumed path for oil prices has been revised down by 5.8 per cent on average through 2028. Conversely, wholesale electricity price assumptions have been revised up significantly by 21.7 per cent for 2026, 15.3 per cent for 2027, and 7.4 per cent for 2028. Natural gas price assumptions have also been revised upwards. DG-Agri food price assumptions were revised lower by 3.3 per cent in 2026, 6.3 per cent in 2027 and 7.2 per cent in 2028 with respect to the previous Bulletin. Exchange rate assumptions with respect to the USD and GBP are close to those used in the previous Bulletin (Table 3).

Table 3: Changes in key Technical Assumptions

Source: ECB, Refinitiv.
Notes: *Annual percent change. Cut-off date: August 20th.

Labour Market and Earnings 

Although employment recovered in the second quarter, growth for 2026 as a whole is projected to remain below rates observed in recent years. This reflects subdued employment growth during the first half of the year, particularly in the first quarter, and a continuing moderation in labour demand based on high-frequency indicators. Employment is forecast to grow by 1.2 per cent this year, unchanged from the previous Bulletin, before rising to 2.1 per cent in 2027, partly reflecting favourable base effects from the weak outturn in 2026. A divergence persists between survey-based employment developments and other administrative labour market indicators, adding uncertainty to the assessment of current conditions. The unemployment outlook remains broadly unchanged from the previous Bulletin with a slight rise in the average annual unemployment rate projected for 2026 to 5.1 per cent, with a rate of 5.2 per cent forecast for 2028. Annual National Accounts revisions resulted in upward adjustments to income across several years. Nominal wage growth is projected to moderate over the forecast horizon as labour market tightness is forecast to continue to ease gradually.

The Q2 2026 Labour Force Survey shows 0.8 per cent year-on-year growth in employment. The benchmark survey-based measure of employment growth is lower than that of other labour market indicators, with monthly administrative payroll data giving 2.1 per cent annual growth in Q2 2026 (Figure 28). Other indicators point to stronger labour market conditions compared to 2025 with cumulative employment permits for the year to August up 33.2 per cent and cumulative income tax receipts 7.7 per cent higher in nominal terms over the same period. The increase in employment permits is mainly driven by the Health and Industry sectors, which collectively account for 44 per cent of the net increase.

Eight of the 14 NACE sectors show year-on-year growth in employment in Q2 2026 with the remainder experiencing decreases. The largest increases were in Transport (+7.2 per cent) and Education (+6 per cent), while the steepest declines were in Professional services (-8.6 per cent) and Agriculture (-3.6 per cent). The ICT sector contracted by 1.2 per cent year-on-year amidst redundancy announcements across several large firms. Employment in the sector has declined since 2024, owing primarily to a reduction in computer programming roles as observed at the NACE 2-digit level. The rise in economy-wide employment levels has not been matched by an increase in labour market utilisation as both the employment rate and labour force participation rate have declined by 0.4 percentage points to 74.3 per cent and 66 per cent, respectively. Non-Irish workers accounted for all the net increase in year-on-year employment in Q2 2026, with employment levels of Irish workers declining by 0.5 per cent (Figure 29). This continues a trend in recent years in which non-Irish workers have accounted for most of the expansion in aggregate employment.

The population increased by 1.2 per cent in the twelve months to April 2026. Annual CSO population and migration estimates showed a 66,900 person rise in the population to 5.53 million with net inward migration contributing most of this growth (+48,100).^[5] Net migration is down from 59,700 persons in the year to April 2025, though this moderation is in line with CSO long-term projections with overall population growth currently tracking the high net migration scenario (M1) (Figure 30). The population already exceeds the central scenario (M2) by 0.8 per cent (45,500 persons).

The ILO unemployment rate for persons aged 15-74 years increased to 5.1 per cent in Q2 2026, up from 4.9 per cent a year earlier. The number of unemployed persons rose by 10,100 since Q2 2025 to 150,900 persons. Higher-frequency indicators, including the monthly unemployment rate, have shown a gradual increase in unemployment over the last two years. These developments are consistent with a moderation in labour demand and mobility, with Indeed Job postings for July down 13.6 per cent relative to a year earlier (falling below the pre-pandemic baseline) and the LinkedIn hiring rate for Ireland following a broadly similar trajectory (Figure 31).^[6] Looking ahead, the unemployment rate is projected to average 5.1 per cent this year before slowly increasing to 5.2 per cent in 2028.

Revisions to Compensation of Employees in the Annual National Accounts, released in July, have resulted in upward adjustments to nominal wages backdated to 2021.^[7] Nominal growth in compensation per employee in 2024 was revised up to 6.6 per cent (3.3 per cent in real terms). This base effect then contributed to a lower growth rate of 2.4 per cent (0.7 per cent in real terms) in 2025. Overall, average real CPE for 2025 is now 4.6 per cent above the initial CSO estimate and 2.5 per cent higher than its pre-pandemic (2019) level. These upward revisions to compensation, in addition to amendments to taxes and transfers, have resulted in higher gross disposable income (GDI) per household. In the revised data, real GDI for 2025 is now 6.4 per cent higher compared to the initial estimate and real GDI in 2025 is 6.8 per cent above its 2019 level.

Wages and incomes are projected to grow over the forecast horizon, consistent with the expected growth in economic activity. The Public Service Agreement 2024-2026 expired in June with no successor deal in place to determine the scale or duration of future public sector pay increases, adding some uncertainty to the outlook for overall wage growth. Revisions to real wages and incomes indicate that both have moved above their 2019 levels, which may alleviate wage pressures to an extent, although this is also dependent on the future path of inflation. Recent QNA data indicate that nominal CPE increased by an average of 6.1 per cent in the first half of the year compared to 2025, equivalent to a 2.5 per cent increase in real terms. This, however, partly reflects compositional changes in the wage bill due to weaker employment levels in relatively lower-earning sectors such as Retail and Accommodation. Lower aggregate wage growth is projected for the remainder of this year amid moderating labour demand. Nominal CPE continues to recover from the weak outturn in 2025 with nominal CPE forecast to average 4.7 per cent growth in 2026 before slowing to 3.8 per cent and 3.5 per cent in 2027 and 2028, respectively. Real CPE growth is forecast to average 0.5 per cent per year over the forecast horizon with real GDI per household averaging 0.3 per cent per year (Figure 32). Looking ahead, while earnings growth is projected to remain positive in real terms, further reductions in labour market mobility, together with a modest rise in unemployment, are likely to weigh on worker wage bargaining power and may limit pressure on wage growth. Upside developments to GDI may occur in the event of changes to taxation bands in Budget 2027.

Table 4: Labour Market Forecasts

Public Finances

The underlying budget deficit, which excludes estimated windfall corporation tax (CT) receipts, is projected to deteriorate over the forecast horizon, as expenditure growth is forecast to exceed that of revenue. Average annual spending growth of 7.3 per cent is forecast over 2026 to 2028 while, in underlying terms, revenue growth is expected to average 5.9 per cent per annum over the same period.^[8] Consequently, the underlying budget deficit is projected to deteriorate from 1.5 cent of GNI in 2025 to 3.1 per cent in 2028 (Table 5). This outlook is broadly consistent with that in the June Quarterly Bulletin. The headline budget balance is projected to remain in surplus but to be lower at the end of the forecast horizon (Figure 33), falling from 3.4 per cent of GNI in 2025 to 2.1 per cent of GNI* in 2028.

Table 5: Key Fiscal Indicators, 2025-2028

Source: Central Bank of Ireland projections.
Note: GG indicates General Government. Underlying GGB excludes estimates of excess CT and receipts from the Apple state aid case; (f) is forecast.

Tax revenue growth has been strong so far in 2026, while current government expenditure is increasing at a faster pace than was anticipated at the beginning of the year. Exchequer data for the first eight months of 2026 show year-on-year growth in income tax of 7.7 per cent and of 7.3 per cent in VAT over the same period in 2025. Cumulative corporation tax (CT) revenue, exclusive of receipts linked to the Apple State aid case, is 8.3 per cent above the level for the same period last year. This increase is supported by €1.2bn in supplementary receipts related to the introduction of the Minimum Tax Directive. Excluding the latter, growth in CT receipts were broadly flat on a year-on-year basis (Figure 34). Revenue from excise duties has declined over the year, reflecting lower monthly collections since fuel excise reductions were implemented in March, in response to the US-Iran conflict. The planned restoration in this duty, due to begin in September, has been paused by the Government. Total gross cumulative voted spending was 7.5 per cent higher in the year to August, broadly consistent with the annual rate of increase targeted in Budget 2026. Current expenditure is increasing at a faster pace than was expected at the beginning of the year, however, and the 2026 current expenditure ceiling has been revised up by €900m since the first quarter (Figure 35).^[9] In July, the Government published its Summer Economic Statement. This indicates that a €8.5bn fiscal package, encompassing €1.5bn of tax measures and €7bn of spending measures, will be introduced in Budget 2027, with the projected total expenditure ceiling for next year unchanged from the level set in the April Annual Progress Report. The factors that pose a risk to the public finances are discussed in further detail in the Balance of Risks below.

The General Government debt (GGD)-to-GNI* ratio is projected to fall over the projection horizon. The debt ratio is expected to decrease from 62.9 per cent of GNI* in 2025 to 52.5 per cent in 2028 (Figure 36). This improvement reflects a combination of projected headline primary surpluses (averaging 3.7 per cent of GNI* over 2026-2028) and a continuing favourable interest rate-growth rate differential. The latter is expected to narrow from the very favourable rates that occurred in recent years, however, as tighter financing conditions are projected to raise annual interest costs on public debt from around €3bn in 2025 to just over €6bn in 2030.^[10] The National Treasury Management Agency (NTMA) has raised €10.9bn through bonds sales in the year to date, bringing the State's total funding to the lower bound of its target for the year (€10-14bn). Ireland retains large liquid cash balances (partly reflecting receipts from the Apple state aid case) of €25.1bn at end of Q2. This balance is expected to remain broadly unchanged to end-year.

Balance of Risks to the Outlook

Risks to the overall outlook for economic growth are now broadly balanced. This assessment reflects downside risks due to energy price developments and geopolitical tensions in the Middle East offset by upside risks to modified investment and private consumption based on the implied momentum from recent outturns. Geopolitical tensions in the Middle East remain elevated, sustaining upward pressure on energy prices. If the war persists or escalates, the resulting higher inflation would directly reduce economic activity in Ireland by lowering real incomes and increasing input costs for firms. Higher global commodity prices would reduce economic activity in Ireland's main trading partners through the same channels, thereby lowering external demand for the traded sector of the economy. The decline in exports and activity in this sector would, over time, spill over to investment and the broader domestic economy, further reducing MDD and contributing to a decline in overall output, relative to the baseline projection. Other downside risks stem from export concentration in pharmaceuticals and ICT sectors and more prolonged infrastructure constraints limiting housing output and activity in other parts of the economy. Upside risks to growth arise from the potential for even stronger-than-expected AI capital expenditure, though this component is characterised by high volatility. Private consumption could also surprise to the upside, given the strong momentum implied by the outturns in the first half of 2026, as well as positive signals from high-frequency indicators.

Depending on the state of geopolitical tensions in the Middle East, energy prices could be higher than assumed in the central forecast. The balance of risks to the inflation outlook is primarily tilted to the upside, stemming from the potential for a prolongation of geopolitical tensions in the Middle East. Given the uncertainty over the path of the conflict, we provide an update to the alternative stylised (severe, adverse, and milder) scenarios that were presented in our previous Quarterly Bulletin in June 2026. Figures 37 and 38 show the oil and gas price paths used for this update. In the severe scenario, oil and gas prices rise sharply above baseline and remain persistently elevated out to 2028, alongside a marked rise in global food prices. Figures 39 and 40 show the updated impact of each scenario on HICP inflation and MDD growth. The estimated impacts across all three scenarios are similar to those published in the previous Quarterly Bulletin. Under the severe scenario, HICP inflation would be 0.5 and 2.1 percentage points higher, and MDD growth 0.1 and 1.1 percentage points lower, in 2026 and 2027 respectively, relative to the baseline. Applying the estimated impacts from the severe scenario to the central forecasts, HICP inflation would stand at 3.9 per cent and 5.2 per cent in 2026 and 2027, respectively. MDD growth would be reduced to 3.7 per cent in 2026 and 2.3 per cent in 2027. For more detailed information on the scenario assumptions, transmission mechanisms and caveats, see ECB's September Staff Macroeconomic Projections (Box 4) and Quarterly Bulletin Q2.

Risks to the non-energy components of inflation are also primarily tilted to the upside. Food inflation faces upside risk, as elevated input costs combined with the extreme weather events observed during 2026 could exert additional upward pressure on prices. Services inflation has remained highly persistent throughout 2026, continuing to add close to 2 percentage points to the headline rate, and there is a risk that this persistence continues for longer than projected in the baseline. Elevated energy costs could generate stronger-than-anticipated indirect effects and, coupled with potential second-round effects from wage adjustments, risk adding further upward pressure to prices and lengthening the persistence of this shock to headline inflation.

The balance of risks to the export forecast is to the downside over the medium term given the high level of concentration in pharma and ICT exports, with the polypeptide hormone export cycle presenting both upside and downside risks. Despite the potential for continued low reported unit values in customs trade data, the baseline assumes that the volume of polypeptide hormone exports grows at moderate levels over the forecast horizon reflecting strong international demand for weight-loss drugs and that this will support growth in overall net trade. Consistent with the recent high level of volatility observed in recent CSO outturns for goods exports and GDP up to Q2 2026, the projections for these headline aggregates are associated with a wide degree of uncertainty at present and there is a risk that reported trade volumes in official data are weaker than projected in the baseline forecast. On the upside, if global demand for diabetes and obesity treatments continues to rise rapidly, pharma exports could grow faster than assumed in the baseline. In the short term, there is some upside risk to services exports from the presence of frontier AI firms in Ireland which could contribute to faster growth in computer services exports over the forecast horizon than projected in the baseline. Over the medium term, there are downside risks to Irish exports and corporation tax receipts if US MNEs actively reduce their activity in Ireland. Changes in US corporate tax or industrial policy could affect the location of intangible assets and production, with knock-on effects for goods and services trade, investment and corporation tax receipts. Moreover, the economy is vulnerable to firm or sector-specific shocks affecting the pharmaceutical or ICT sectors. Firms in the services sector differ from their counterparts in the manufacturing sector as the required sunk investments in Ireland tend to be lower. As a result, the activity and employment arising from the MNE-dominated parts of the services sector are likely to be more sensitive to negative shocks.

AI-related developments are likely to have a meaningful impact on the economy over both the short and medium term, though both the magnitude and nature of these changes are highly uncertain. Investment and import volatility related to AI and data centre hardware has been substantial, with the AI-related goods import basket reaching €7.7bn in Q2-2026, about a fifth above its Q4-2025 peak. Much of this investment is allied to a small number of large MNEs in the ICT sector. There are upside risks to M&E forecasts coming from a more substantial AI capital expenditure than incorporated in current projections, particularly if frontier AI firms continue to expand their Irish operations. On the downside, a correction in equity markets related to AI valuations could result in some pull back of capital spending in this sector. Such a correction would have implications for exports, investment, employment and tax revenue given the concentration of activity in a small number of firms. Over the medium term, AI developments present both productivity opportunities and labour market uncertainties. The low exposure of Irish households to direct holdings of bonds and equity assets suggests limited short-term wealth effects from financial market movements, whether positive or negative. However, the positioning of Ireland as a hub for AI-related infrastructure and services could provide longer-term benefits to competitiveness and growth, provided that enabling infrastructure keeps pace with demand.

Capacity constraints could worsen if progress on alleviating infrastructure gaps in the economy is delayed or inadequate. This risk could arise even if a slowdown in the pace of economic growth transpires. Planned expenditure under the National Development Plan is designed to address shortages of critical infrastructure in water and wastewater, energy, transport and housing. Reforms such as those in the Accelerating Infrastructure Report and Action Plan are designed to reduce delays in the delivery of large national infrastructure projects. For housing output to build on last year's outturn, improvements in the timing of infrastructure delivery is required, particularly water and metered electricity connections. While there have been over 100,000 housing commencements since 2024, the timing around housing and apartment delivery suggests that without further improvements in commencements and building time, current projections may be difficult to meet. Any further acceleration in input costs resulting from a prolonged war in the Middle East and associated increases in energy costs would present downside risks to the forecasts. Delayed progress resulting in persistent deficits in the provision of key infrastructure represents a downside risk to the projections for investment. If this materialised, lower investment would act as a drag on long-term growth and productivity. Over the short run, this could result in higher and more persistent inflation triggered by domestic pressures and, with competitiveness impaired, weaker economic growth occurring over the longer term. Domestic capacity constraints and inflationary pressures, and the associated negative implications for long-term growth, would be aggravated if the pattern of procyclical budgetary policy persists.

Government expenditure growth is running well in excess of the growth in tax revenue when excess corporation tax is excluded, presenting a material downside risk to the public finances. Annual spending growth is expected to average 7.3 per cent over 2026 to 2028, while annual growth in underlying revenue is expected to average 5.9 per cent over the same period. As a result, the underlying budget deficit is projected to deteriorate from 1.5 per cent of GNI* in 2025 to 3.1 per cent in 2028. Corporation tax receipts are highly concentrated, with two sectors accounting for over half of total CT revenue, and remain vulnerable to changes in US trade or taxation policy. CT is expected to continue to grow strongly but this projection is subject to significant uncertainty. The absence of an effective fiscal anchor in the context of rising underlying deficits presents risks to the sustainability of the public finances. In-year revisions to expenditure plans could further widen the underlying deficit if not matched by corresponding revenue measures. The concentration of CT receipts in a small number of firms means that any significant changes to the activities or tax arrangements of these firms could have material implications for the budget balance.

Detailed Forecast Table

Quarterly Bulletin No. 3 2026: Boxes

An Timpleallacht Gheilleagrach

Leanann athruithe struchtúracha suntasacha, i dteannta dálaí timthriallta rialta gnó, de thionchar a imirt ar an ngeilleagar domhanda agus ar Éirinn. Tá ardteannas trádála ann i gcónaí agus tá gnóthaí ag dul i dtaithí ar thimpeallacht trádála atá scoilte agus nach bhfuil chomh fabhrach céanna leis an timpeallacht a bhí ann le blianta beaga anuas. Ina theannta sin - agus ag freagairt do thimpeallacht gheopholaitiúil atá níos luainí - tá athbhorradh faoi phraghsanna fuinnimh domhanda de thoradh an chogaidh idir an Iaráin agus na Stáit Aontaithe, rud a spreagann athuair na brúnna a d’eascair as ionradh na Rúise ar an Úcráin, brúnna nach ndeachaigh i léig ach le déanaí. Le linn an tsamhraidh, chonacthas na teochtaí is airde riamh ar fud na hEorpa, mar aon le triomach faidréiseach, agus is é is dóichí gur tharla teagmhais adhaimsire den sórt sin de thoradh éifeachtaí an athraithe aeráide. Chuir sé sin brú ar tháirgeadh agus iompar bia, rud a ghéaróidh boilsciú atá ard cheana féin. Níos gaire don bhaile, tá athruithe struchtúracha ag teacht ar an margadh saothair, lena n-áirítear glacadh teicneolaíochtaí nua, an daonra ag dul in aois i gcónaí agus ról méadaitheach tábhachtach na himirce glan isteach araon - rud is cúis le tuairim is dhá thrian den fhás fostaíochta cheana féin. I bhfianaise na bhfórsaí suntasacha seo, tá athléimneacht an-mhaith léirithe ag an ngeilleagar go dtí seo ach tá gá le roghanna cúramacha beartais agus pleanáil fhadtéarmach chun fás eacnamaíoch seasmhach agus dífhostaíocht íseal a chothú, boilsciú a laghdú agus chun staid bhunaidh an airgeadais phoiblí a fheabhsú.

Sna sonraí bliantúla Cuntas Náisiúnta arna bhfoilsiú ag an bPríomh-Oifig Staidrimh i mí Iúil, deimhnítear fás tapa leanúnach ar an ngeilleagar sa tréimhse i ndiaidh na paindéime. An bhliain seo caite, tháinig fás 4.7 faoin gcéad ar an ngeilleagar, arna thomhas ag Ollioncam Náisiúnta (OIN*) modhnaithe réadach. Ó 2021 i leith, tá meánráta bliantúil fáis de 5.5 faoin gcéad taifeadta ar OIN* réadach, go mór os cionn ráta fáis ionchasach measta an gheilleagair. Ciallaíonn luas tapa an fháis gur tháinig méadú 35 faoin gcéad nó €89 billiún ar mhéid foriomlán an gheilleagair - bunaithe ar OIN* i dtéarmaí réadacha - idir 2019 agus 2025. Tá fás fostaíochta, ioncaim níos airde agus ioncam méadaithe rialtais bainte amach ag an bhfás sa gheilleagar. In anailís nua arna foilsiú san Fhaisnéis Ráithiúil seo, deimhnítear tábhacht mhéadaitheach na hearnála ilnáisiúnta d’fheidhmíocht eacnamaíoch na hÉireann arna tomhas le OIN* (Bosca B). Cé go bhfuil saothar agus ioncam eile ó fhoinsí intíre ina gcúis leis an gcuid is mó den OIN* réadach, tá méadú suntasach tagtha le himeacht ama ar an méid a chuireann FINanna leis sin (lena n-áirítear cáin chorparáide ó FIN, tuarastail agus ioncam gaolmhar eile) - ó 16 faoin gcéad in 2013 go dtí 26 faoin gcéad in 2025.

Deimhnítear leis na sonraí is déanaí go bhfuil an fuinneamh dearfach faoin ngníomhaíocht eacnamaíoch tugtha anonn ó 2025 chuig an gcéad leath de 2026, ach go bhfuil difríochtaí suntasacha le feiceáil ar luas na gníomhaíochta i gcodanna éagsúla den gheilleagar. Fiú leis an mboilsciú níos airde, leanann caiteachas tomhaltóirí de bheith ag fás go seasmhach. Tá spreagadh suntasach á thabhairt ag infheistíocht a bhaineann le FIN don éileamh modhnaithe intíre. Tá próifíl na hinfheistíochta sin míchothrom sna sonraí ráithiúla ach tá an treocht bhunúsach soiléir sa mhéid go bhfuil ardú de bhreis ar aon trian tagtha i dtéarmaí réadacha ar leibhéal na hinfheistíochta in innealra agus i dtrealamh i dtréimhse trí bliana. Tá méaduithe suntasacha ar chaiteachas a bhaineann leis an intleacht shaorga agus ar chrua-earraí lárionad sonraí ag gnólachtaí ilnáisiúnta in Éirinn mar bhonn taca faoin bhfás ar an ngné seo den infheistíocht a mbaineann sciar mhór allmhairí léi. Áirítear na hallmhairí seo san éileamh modhnaithe intíre atá ag an leibhéal uachtarach de réimse na meastachán ar fhás intíre, eadhon beagán os cionn 3 faoin gcéad sa chéad leath de 2026.  I dtomhais eile, amhail aschur na n-earnálacha atá bunaithe go hintíre den chuid is mó, tá luas fáis níos moille le feiceáil de thuairim is 2 faoin gcéad.

Ag féachaint romhainn, is dócha go leanfaidh an pátrún sin le linn bhlianta na réamhaisnéise, sa mhéid go meastar go mbeidh an t-éileamh modhnaithe intíre ag fás de réir meánráta bliantúil níos airde de 3.5 faoin gcéad, i gcomparáid le fás 3.1 faoin gcéad ar OIN* - agus beidh an ceann deireanach sin gar d’acmhainneacht fhadtéarmach mheasta an gheilleagair. Ag glacadh leis go maolóidh boilsciú go dtí thart ar 2 faoin gcéad faoi 2028 i gcomhréir leis na réamhaisnéisí san Fhaisnéis Ráithiúil seo, tacóidh gnóthachain mheasartha ar ioncam réadach ó 2027, mar aon leis an maolán ó choigilteas ard teaghlaigh, le fás seasmhach ar chaiteachas tomhaltóirí. Tá réamhaisnéisí maidir le boilsciú mórán gan athrú ón bhFaisnéis Ráithiúil roimhe seo (mí an Mheithimh) ach tá ardleibhéal éiginnteachta ag baint leis na réamh-mheastacháin bhonnlíne agus tá na rioscaí don fhás cothrom tríd is tríd agus tá na rioscaí don bhoilsciú ar an taobh thuas.

I dteannta méaduithe ar chaiteachas tomhaltóirí, meastar go dtacóidh méadú ar infheistíocht as seo go dtí an bhliain 2028 leis an éileamh modhnaithe intíre. Cé go bhfuil athbhreithniú aníos déanta san Fhaisnéis Ráithiúil seo ar an infheistíocht mhodhnaithe fhoriomlán, tá cuma éiginnte ar an scéal.  Leis an méadú ar éileamh ar bhogearraí agus ar threalamh a bhaineann leis an bhfás ar IS, ba cheart go dtacófaí le méaduithe ar infheistíocht faoi stiúir FIN sna blianta atá le teacht. Féadfaidh go mbeidh fás níos láidre ar an ngné seo sa ghearrthéarma thar an méid atá sna réamh-mheastacháin bhonnlíne má leanann an t-éileamh domhanda de bheith ard.  Maidir le haschur tithíochta, cuirtear fáilte roimh an méadú ar ghníomhaíocht foirgníochta cónaithe sa mhéid go bhfuil beagnach dhá oiread na tithíochta curtha i gcrích idir 2017 agus 2025. Meastar go mbeidh méaduithe breise ar aschur tithíochta as seo go dtí 2028 ach go mbeidh sé seo ag brath ar dhul chun cinn a dhéanamh maidir le gnéithe éagsúla a mbíonn tionchar acu ar sholáthar tithíochta. Is doiligh brí a bhaint as comharthaí ó thosuithe tithe i bhfianaise an bhorrtha arna spreagadh as beartais in 2024. Ina dhiaidh sin, tháinig laghduithe ar thosuithe in 2025 agus 2026, fad atá ceaduithe pleanála bliantúla cobhsaí tríd is tríd sna 30,000 láir. Thairis sin, léirítear in anailís san Fhaisnéis Ráithiúil seo gurb ionann agus ceithre bliana an meánfhad a bhíonn ann ón iarratas pleanála tosaigh a chur isteach go dtí an cur i gcrích, i gcás phíblíne na gníomhaíochta tithíochta reatha (áitribh atá ceadaithe nó tosaithe cheana féin), dhá uair chomh fada le deich mbliana ó shin (Bosca A). Cuireann na gnéithe sin isteach ar an ionchas foriomlán maidir le tithíocht a chuirfear i gcrích agus leagann sé béim ar an tábhacht a bhaineann le cur chun feidhme tráthúil na n-athchóirithe chun soláthar príomh-bhonneagair náisiúnta a luathú, lena n-áirítear na hathchóirithe sin a leagtar amach sa Tuarascáil agus Plean Gníomhaíochta um Luathú Bonneagair. Leis na hathchóirithe sin, má chuirtear i ngníomh iad ar mhodh éifeachtach, tráthúil, i dteannta beart lena méadófar gníomhaíocht, ba cheart go n-éascófaí soláthar tithíochta breise mar atá leagtha amach sa réamhaisnéis lárnach dár gcuid.

Taobh amuigh de chúrsaí tithíochta, léirítear sna sonraí le déanaí an bhearna atá ann idir fás ar an ngeilleagar, ar an bhfostaíocht agus ar an daonra agus ar bhonneagar an Stáit níos leithne. Tháinig méadú 67,000 nach mór ar an daonra go dtí 5.52 milliún le linn na bliana suas go dtí mí Aibreáin 2026. Toisc go bhfuil an méadú nádúrtha ar an daonra ag moilliú, bhí trí cheathrú den mhéadú ar an daonra foriomlán inchurtha d’imirce glan isteach a bhfuil ról tábhachtach aici ó thaobh borradh a chur faoi sholáthar lucht saothair agus faoin bhfostaíocht, agus tá an chuid is mó den fhostaíocht sin i ngairmeacha beatha ardoilte. Cé go meastar go moilleoidh an fás ar fhostaíocht suas go dtí 2028, beidh an imirce ina gné ríthábhachtach i gcónaí i dtaca le soláthar lucht saothair a mhéadú, le turraingí maicreacnamaíocha a sheasamh agus le fás eacnamaíoch a choimeád ar bun.

Chuir praghsanna fuinnimh níos airde go mór le boilsciú príomha in 2026 de réir mar a chuir an cogadh idir na Stáit Aontaithe agus an Iaráin brú aníos ar phraghsanna idirnáisiúnta fuinnimh. I dteannta na mbrúnna seachtracha seo ar phraghsanna, tá an boilsciú ar sheirbhísí ardaithe i gcónaí. Léiríonn sé seo go páirteach tarchur na gcostas ionchuir níos airde agus, chomh maith leis sin, éileamh intíre leanúnach agus brúnna pá. Is é an príomhriosca go bhféadfadh éifeachtaí indíreacha teacht chun cinn, trína lorgódh oibrithe cúiteamh as laghdú pá trí éilimh níos airde ar phá ainmniúil, agus trína gcuirfeadh gnólachtaí na costais saothair níos airde sin ar aghaidh chuig praghsanna do thomhaltóirí chun corrlaigh bhrabúis a choinneáil ar bun. Cé nach bhfuil aon fhianaise ann maidir le héifeachtaí forleathana indíreacha go dtí seo, thógfadh sé níos mó ama orthu seo teacht chun cinn agus tá riosca suntasach ann i gcónaí, go háirithe má bhíonn suaitheadh fuinnimh níos seasmhaí i gceist nó má thagann gearú breise ar an gcoinbhleacht.

Ar leibhéal an limistéir euro, táthar ag freagairt do bhrúnna ardaithe boilscitheacha leis an mbeartas airgeadaíochta chun a chinntiú go gcobhsóidh boilsciú go hinbhuanaithe ag an sprioc arb ionann í agus 2 faoin gcéad sa mheántéarma. An 10 Meán Fómhair, d’ardaigh an Chomhairle Rialaithe na trí eochair-ráta úis de chuid BCE faoi 25 bhonnphointe, i ndiaidh méadú comhchosúil i mí an Mheithimh 2026. Leanann an choinbhleacht sa Mheán-Oirthear de bhrúnna boilscithe a ghiniúint, agus meastar go leanfaidh boilsciú de bheith i bhfad os cionn na sprice ar feadh tréimhse fhadaithe.  Tá breithnithe na Comhairle Rialaithe ag brath ar shonraí i gcónaí agus leanfaidh an Chomhairle d’fhaisnéis nua a mheasúnú ar bhonn cruinniú ar chruinniú. Go háirithe, beidh cinntí na Comhairle Rialaithe maidir le rátaí úis bunaithe ar a measúnú ar an ionchas boilscithe, ar na rioscaí a bhaineann leis agus ar neart an tarchuir beartais airgeadaíochta.

I gcás geilleagar beag oscailte mar atá ag Éirinn, tá ról lárnach ag an mbeartas fioscach maidir le fás inbhuanaithe eacnamaíoch agus boilsciú íseal a bhaint amach sa mheántéarma. Chun an méid seo a bhaint amach, ba cheart go mbeadh an staid fhioscach fritimthriallach, i.e. ba cheart go dtacódh sí leis an ngeilleagar nuair a bhíonn sé ag feidhmiú faoi bhun a acmhainne inbhuanaithe (i.e. nuair atá dífhostaíocht ard ann) agus, i gcor dá mhalairt, ba cheart go laghdódh sí an t-éileamh nuair a bhíonn an geilleagar ag feidhmiú thar a acmhainn inbhuanaithe agus nuair a bhíonn rioscaí boilscitheacha iomarcacha ann. Tugann dálaí reatha agus dálaí tuartha eacnamaíocha agus an mhargaidh saothair le fios nach bhfuil spreagadh breise buiséadach ag teastáil ón ngeilleagar faoi láthair. Buntáiste a bhaineann le staid beartais fhritimthriallach a leanúint sna dálaí reatha eacnamaíocha is ea go bhféadfaí maoláin mhóra fhioscacha a charnadh agus go bhféadfaí iad sin a úsáid ansin dá mbeadh cor chun donais sa ghníomhaíocht eacnamaíoch agus méadú ar dhífhostaíocht.

Ó tharla go bhfuil boilsciú i bhfad os cionn 3 faoin gcéad cheana féin agus an chothromaíocht rioscaí don réamhaisnéis lárnach ar an taobh thuas, sheachnófaí brúnna praghais sa gheilleagar a ghéarú trí sheasamh buiséadach fritimthriallach a leanúint. I dteannta leithdháiltí suntasacha ar lá an bhuiséid, bhí róchaiteachas coitianta le blianta beaga anuas (i gcomparáid le pleananna tosaigh an Rialtais), rud a thugann spreagadh breise don gheilleagar. Mar a léirítear in anailís, chuirfeadh róchaiteachas leanúnach i gcomhréir le rátaí fáis i ndiaidh 2021 tuairim is 1 faoin gcéad leis an leibhéal praghsanna faoi dheireadh na tréimhse deich mbliana seo.^[11]

Ba cheart na huasteorainneacha caiteachais gan athrú i Ráiteas Geilleagair an tSamhraidh (i gcomparáid leis an Tuarascáil Bhliantúil ar Dhul Chun Cinn i mí Aibreáin 2026) a choinneáil do Bhuiséad 2027 chun go dteorannófar neamhchosaint fhioscach ar fháltais ó cháin chorparáide, arna gcomhchruinniú i measc líon beag gnólachtaí ilnáisiúnta, ar fáltais iad a d’fhéadfadh a bheith sealadach.

Trí sholáthar bonneagair phoiblí nua a uasmhéadú chun dul i ngleic le heasnaimh aitheanta i bpríomh-bhonneagair náisiúnta agus chun infheistíocht phríobháideach níos airde a shluachistiú, spreagfar acmhainn fáis an gheilleagair san fhadtéarma. Le hinfheistíocht atá dírithe ar dhícharbónú an gheilleagair a luasghéarú, chuideofaí leis an neamhchosaint ar phraghsanna luaineacha breosla iontaise allmhairithe (lena n-áirítear de thoradh turraingí geopholaitiúla) agus thacófaí le costas fuinnimh níos cobhsaí do theaghlaigh agus do ghnóthaí Éireannacha.  Leis na gníomhaíochtaí seo, rannchuideofaí freisin le spriocanna a bhaint amach i ndáil le laghduithe astaíochtaí, ar spriocanna iad nach bhfuil á mbaint amach faoi láthair. Freagairt níos inbhuanaithe ar an timpeallacht ardbhoilscithe reatha a bheadh inti seo ná na giorruithe máil ar bhreoslaí atá neamhdhírithe den chuid is mó agus a dhéanann difear do chomharthaí praghais agus atá ina riosca maidir le cúngú breise nach dteastaíonn ar an mbonn cánach. Maidir le teaghlaigh atá neamhchosanta go mór ar éifeachtaí na bpraghsanna fuinnimh níos airde, féadfar na teaghlaigh is leochailí a chosaint le bearta sealadacha, spriocdhírithe, fad a chinnteofar go gcothófar athléimneacht san airgeadas poiblí leis an seasamh buiséadach foriomlán.

Endnotes

1. See Boyd et al. (2026) (PDF 1.01MB).↑
2. See Intel Invests €5 Billion to Expand Manufacturing in Europe. ↑
3. The Uisce Éireann connection charge refund scheme and local authority development levy waiver required residential developments to commence on site by December 31, 2024, and finish construction by December 31, 2026.↑
4. See Quarterly Bulletin Q2 2026. ↑
5. See CSO Population and Migration Estimates 2026 for further details. ↑
6. The LinkedIn Hiring Rate ("LHR") measures the pace at which workers take up new opportunities. It is calculated as the percentage of members who added a new employer to their profile in the same month the new job began. ↑
7. Revisions to Compensation of Employees (COE) including; Exhaustive adjustment to COE estimate to account for wages paid outside the Revenue payroll system, updated pensions data from the Irish Pensions Authority, inclusion of employer contributions to PRSAs and updated Payroll data from Revenue Commissioners. ↑
8. Underlying revenue excludes Central Bank estimates of windfall corporation tax. For more information on how this is calculated see Conefrey et al., 'Managing the Public Finances in a Full Employment Economy', Signed Article, Central Bank of Ireland Quarterly Bulletin 2, June 2023. ↑
9. February's Fiscal Monitor reported a gross voted expenditure ceiling of €117.4bn for 2026, which represented annual spending growth of 7.5 per cent. In June this ceiling increased to €118.3bn (annual spending growth of 8.3 per cent) reflecting a higher current spending profile (€99.1bn from €98.3bn). The capital expenditure target, by comparison, was unchanged at €19.1bn. ↑
10. The negative interest-growth differential is estimated to have reduced the debt ratio by an average of 8.5 per cent per annum in the five years to 2025. This favourable impact is forecast to average 2.5 per cent each year over the projection horizon. ↑
11. Féach Boyd et al. (2026) (PDF 1.01MB).↑