As we draw the curtain on a challenging year, three Chartered Accountants offer their personal insights and predictions for the Irish economy in 2025
John Donoghue, Chief Executive Officer at Ifac
As we look ahead to 2025, Ireland’s farming and agribusiness sectors face a pivotal year marked by both opportunities and challenges.
While 2024 has delivered favourable weather conditions and decent commodity prices, regulatory and environmental hurdles will test the resilience of agricultural enterprises in 2025.
The most pressing concern is the potential loss of Ireland’s nitrates derogation. The derogation has been crucial in enabling Irish farms to maintain high productivity levels, and its removal would require significant operational changes.
At Ifac, we are conducting extensive stress testing with dairy farmers to assess various scenarios, including reduced herd sizes, expanded storage facilities and land acquisition strategies.
We recently welcomed Dr Rosie O’Neill as Director of Sustainability, and she is working closely with businesses in food and agriculture to help them plot their sustainability journey.
Sustainability has emerged as the defining challenge across farming, food production and agribusiness. Large food producers face mounting pressure from retail customers to demonstrate not only their own environmental credentials but also the sustainability of their entire supply chain.
The dairy sector appears to be reaching a plateau after years of expansion. Current trends suggest the number of dairy farmers in Ireland could decline from 16,000 to about 12,000 over the next five to six years, presenting significant output risks and a big challenge for our major dairy co-operatives.
The regulatory burden continues to grow, particularly with the Corporate Sustainability Reporting Directive (CSRD) coming into effect. From 2025, a broad group of our corporate clients will need to report on their sustainability metrics, adding another layer of complexity to business operations.
Export markets offering growth opportunities and expansion into larger markets, particularly the UK and US, remain crucial for our food producers.
The road ahead demands a delicate balance between maintaining productivity and meeting environmental requirements. Success will require investment in sustainability initiatives, careful strategic planning and continued innovation across the sector.
Sarah Meredith, Tax Partner at Grant Thornton
From the perspective of a tax advisor, my hopes for 2025 include simplifying and bringing certainty to the tax code.
We have witnessed some seismic changes to the tax landscape in recent years, driven largely by the Organisation for Economic Co-operation and Development (OECD) and European Union initiatives.
For groups within the ambit of the OECD’s Pillar II rules, the approach to tax compliance has fundamentally shifted from 2024, regardless of whether there is ultimately further top-up tax due.centre
The Department of Finance has launched several initiatives centred around simplification, including the interest review and examining the SME sector to streamline tax-related matters. It would be hugely beneficial to see tangible results from these reviews.
Alongside the tax regime, I would also hope that Ireland – and, in particular, the new government – will address issues such as housing, infrastructure, planning and the funding of higher education. These are the crucial pieces of the jigsaw for Ireland to remain competitive.
With falling interest rates, supported by lower inflation rates, I would be hopeful of higher deal flow and activity within the economy. The modified domestic demand (a proxy for the domestic economy) is forecast to grow at circa 2.6 percent annually from 2024 to 2026, buoyed by the continued strength of the labour market. These factors should all provide a good foundation for maintaining Ireland’s competitiveness and attracting inward investment.
Overall, Ireland's future looks bright, but we need to ensure we provide a solid framework within which businesses can continue to grow and expand, which should be supported by both infrastructural improvements and the provision of tax certainty.
Mark Flood, Director at Renatus Capital Partners
Parking the obvious global geopolitical elephant in the room, we are very positive about the outlook for businesses in Ireland in 2025 for three reasons:
- The wave of inflation we have seen in recent years appears to be receding – the hangover remains for some, but in the main, many have either recovered increased inflation-driven cost to the top line or learned to be nimbler with their costs to counter its effect.
- There is historically low leverage out there among SMEs – they can withstand a lot.
- The healthy position of the Irish exchequer.
Notwithstanding, there is a cohort of people and companies trapped by higher costs and capped income. Though these are in the minority, we should spare a thought for them.
We have the best entrepreneurs in the world, and there are so many companies going global. At the same time, foreign funds are coming to Ireland because they see us as a country of great businesspeople and entrepreneurs.
I spoke recently to a restaurant owner in a university town where, unlike others, accommodation has been injected.
She told me her labour challenges had been largely solved by people living in her town and working part-time. It would be great if we could solve the accommodation crisis on a broader basis to improve the situation for all.
Let’s hope we can solve our housing problem, that global geopolitical developments do not create further challenges and we can continue to drive on in 2025.
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