Cathal Crowe (Clare, Fianna Fail)
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38. To ask the Minister for Finance his Department’s expectations for consumer spending this year; and if he will make a statement on the matter. [27862/25]

Catherine Ardagh (Dublin South Central, Fianna Fail)
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74. To ask the Minister for Finance his projections for core inflation in 2025; and if he will make a statement on the matter. [27857/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 38 and 74 together.

The Irish economy entered 2025 in a strong position, with Modified Domestic Demand growth of 2.7 per cent last year. Consumer spending increased by 2.3 per cent reflecting, in part, the easing of inflation last year, with core inflation (i.e. excluding energy and processed food) averaging 2.4 per cent, amongst the lowest recorded rates in the euro area.

Earlier this month, the Government published its Annual Progress Report (APR), which sets out my Department's macroeconomic and fiscal forecasts for 2025 and 2026.

The baseline forecasts were produced during March on the assumption that no transatlantic tariffs would be introduced and were endorsed by the Irish Fiscal Advisory Council. On this basis, my Department is projecting consumer spending to increase by 2.8 per cent this year. Core inflation is expected to average 2.2 per cent this year.

Given the significant change in the global tariff landscape in recent weeks, my Department also produced an additional alternative scenario that attempts to incorporate the impact of tariffs that were in place at the time of the publication.

In this scenario, while the domestic economy is still expected to grow, the level of MDD at end-2026 is around 1½ per cent below its level in the ‘no-tariff’ scenario. This reflects a combination of weaker consumer spending and lower levels of investment by firms.