Cathal Crowe (Clare, Fianna Fail)
Link to this: Individually | In context

24. To ask the Minister for Finance his assessment of the near-term outlook for the economy; and if he will make a statement on the matter. [27861/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

While our economy – in aggregate terms – is undoubtedly in a strong position at present, the near-term outlook is clouded in considerable uncertainty. In particular, regarding the future of the rules-based, multilateral trading system.

Earlier this month, the Government published Ireland’s Annual Progress Report , which sets out my Department's macroeconomic and fiscal projections for 2025 and 2026.

The baseline forecasts were produced during March on the assumption that no transatlantic tariffs would be introduced. On this basis, Modified Domestic Demand (MDD) – our preferred measure for the domestic economy – is projected to grow by 2½ per cent this year, a downward revision of almost ½ percentage points from the autumn forecasts, reflecting heightened levels of uncertainty.

Given the significant change in the global tariff landscape in recent weeks, my Department also calibrated an additional alternative scenario that attempts to incorporate the impact of tariffs that were in place at end-April. In this alternative scenario, while the domestic economy is still expected to grow, the level of MDD would be around 1½ per cent below the baseline level by end-2026.

It is also important to stress that even in the absence of any further tariffs, elevated uncertainty is a source of economic weakness that will weigh on growth.

While the outlook is subject to considerable uncertainty, what is clear is that we need to redouble our efforts to boost the resilience and competitiveness of the economy.

This will help ensure that we are in the best position possible as we navigate this period of uncertainty.