Ireland Outlook – July 2026
New Irish Economic Forecasts
We expect a contraction in GDP (-3%) in 2026 due to the surge in pharmaceutical exports last year, driven by fears of US tariffs, which has now unwound. Modified domestic demand is forecast to grow by 3.5% in 2026 and 2.5% in 2027, revised slightly upwards. Our lower forecast for CPI inflation of 3.1%, based on oil prices of $86/bbl, will support consumer spending growth at a slightly faster pace of 2% in 2026. Investment has been boosted by housing completions (39,000 expected in 2026) and a 17% increase in machinery and equipment spending in Q1, related to the AI investment cycle. We expect job creation to bounce back, with employment growing by 1.1% in 2025 and the unemployment rate remaining at 5%.
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