Last week, the Economic and Social Research Institute (ESRI) published its Quarterly Economic Commentary. In the press release which accompanied this publication, the ESRI refers to the economy continuing to perform robustly, with recent data show strong growth in consumption expenditure, employment and tax receipts. The ESRI expects this positive situation to continue over the forecast horizon and are estimating modified domestic demand (MDD) to grow by 3.8 percent in 2025 and 3.2 percent in 2026.
Although the immediate risk of punitive US tariffs has eased for now, the commentary highlights that a broader shift away from trade liberalisation continues to pose a challenge to Ireland’s economic model. While there was a large increase in exports in Q1, which was most likely a pre-emptive reaction to threatened tariffs, Q2 saw a significant scaling back on this growth rate, although pharmaceutical exports continued to grow strongly year on year in Q2. Data for July 2025 points towards a drop off in pharma exports relative to the same month in 2024 and there is an assumption that this fall back will continue for the rest of 2025. The ESRI expect exports to grow by 6.1 percent in 2025 and by 0.9 percent in 2026.
In terms of employment, the ESRI comments that growth remains positive but some tentative signs of a softening in the labour market is evident in the most recent data.
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