The Department of Finance has warned that the continuation of 10% US tariffs would have a significant impact on Ireland’s economic performance in 2026.
New projections suggest that Gross Domestic Product (GDP) could fall by 1.5 percentage points under this scenario.
GDP is a broad measure of economic activity that includes the performance of multinational corporations operating in Ireland.
The impact would also be felt domestically.
The Department estimates that growth in the domestic economy—reflecting activity more closely tied to Irish households and businesses—would decline by 1 percentage point.
Employment growth is projected to slow by 0.5 percentage points, translating to approximately 25,000 fewer jobs by the end of next year.
Two sets of forecasts were published by the Department today: one based on the assumption that the tariffs remain in place, and one assuming no import duties are applied.
Under the no-tariff scenario, Ireland’s GDP is expected to grow by 4.1% in 2025, with the domestic economy expanding by 2.5%.
Looking ahead to 2026, GDP growth is projected at 3.4%, while domestic activity is forecast to increase by 2.8%.
At a press briefing, Minister for Finance Paschal Donohoe acknowledged the heightened uncertainty surrounding the global economy.
"We are in a time of immense uncertainty," he said, noting that additional external risks could materialise in the coming weeks and months.
“The higher the level of uncertainty, the worse the outlook for global growth,” he added.
Despite these concerns, the Minister pointed to encouraging signs in the national accounts.
Exchequer figures released today showed income tax receipts up by 4.8%, indicating that the Irish economy continues to perform robustly for now.
However, Minister Donohoe also flagged emerging risks in the media sector.
In response to potential US tariffs on Irish film exports, he described the issue as a “cause for concern,” underlining the growing pressure on Ireland’s creative industries amid international trade tensions.
These projections highlight the vulnerability of the Irish economy to global developments, particularly in light of its strong trade links with the United States and reliance on multinational investment.
*This article was originally published on BusinessPlus.ie.
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