The Economic and Social Research Institute (ESRI) recently published its Spring 2026 Quarterly Economic Commentary, highlighting a higher inflation outlook, driven mainly by the potential effects of the conflict in the Middle East. The ERSI notes that the uncertainty the conflict has created has already weakened the global outlook and increased the risk of renewed, sustained inflationary pressures in Ireland and internationally.
On a more positive note, the report outlines that the economy performed strongly in 2025, with exports rising by 9.6 percent, even though growth slowed as the year went on. Modified domestic demand grew by 4.9 percent over the year. Despite the inflationary pressures linked to the Iran crisis, the ESRI expects the domestic economy to continue expanding in 2026 and 2027, with forecasted MDD growth of 2.1 percent in 2026 and 2.8 percent in 2027.
While recent international events are shaping short‑term economic considerations, the ESRI cautions that there are still important longer‑term risks to Ireland’s economic success. These include the highly concentrated nature of Ireland’s tax revenues, the imbalance in productivity and performance between foreign-owned and domestic firms, ongoing budgetary overruns and the continued challenge of addressing infrastructure deficits, especially regarding housing.
Towards the end of 2025, labour‑market data suggested some softening, with one area of concern being an apparent rise in youth unemployment.
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