Irish GDP expands by 12% in 2025
The news Irish GDP contracted by 3.8% in Q4 2025, is explained by the surge in exports that occurred in September, around the time President Trump threatened a 100% tariff on pharmaceuticals, unwinding. However, manufacturing output has been more stable – indicating a structural upward shift in the level of GDP associated with new pharmaceutical production facilities and weight-loss drugs. So following today’s data we will leave our forecast for 2.8% GDP growth in 2026, following the 12.3% rise in 2025, broadly unchanged.
Stepping back from the volatility created by the multinational sector, Irish modified domestic demand grew by 4.9% in 2025, supported by robust gains in consumer spending (2.9%), government expenditure (4.1%) and investment (11%). Here, a welcome rebound in construction sector output was a key contributor, housing completions and non-residential activity bouncing back as build cost inflation has become less of a headwind. The rebound in construction sector activity in 2025 was far better than the dour picture painted by Ireland’s Construction PMI survey was which was below the key 50 no-change level in all but two months of last year.
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