{ "title": "Ireland: Staff Concluding Statement of the 2026 Article IV Mission", "publication": "IMF News, May 25, 2026", "sourceUrl": "https://www.imf.org/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission", "canonical": "https://www.imf.org/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission", "overlayPath": "/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/index.md", "summary": "Dublin, Ireland – May 25, 2026: The Irish economy has maintained strong performance despite trade and geopolitical tensions and elevated uncertainty. But given Ireland’s structural vulnerabilities in a world that is becoming more unpredictable, this resilience cannot be taken for granted.", "publishDate": "2026-05-25", "sections": [ { "heading": "Overview and key findings", "content": "- Date: May 25, 2026.\n- The Irish economy has maintained strong performance despite trade and geopolitical tensions and elevated uncertainty.\n- Given Ireland’s structural vulnerabilities and rising global unpredictability, current resilience “cannot be taken for granted.”\n- Policy emphasis: prioritize temporary and targeted measures for vulnerable groups in response to the war in the Middle East, and avoid broad-based measures such as tax cuts, subsidies, and price controls.\n- The mission identifies three broad policy priority areas: Fiscal, Financial, and Structural." }, { "heading": "Outlook and risks", "content": "- Baseline projection assumptions: consistent with the energy futures prices as of May 12th and the IMF April 2026 World Economic Outlook reference scenario.\n- Growth projections:\n - Modified domestic demand growth is projected to moderate from almost 5 percent in 2025 to about 2½ percent in 2026-27.\n- Inflation projections:\n - Headline inflation is projected to rise to about 3½ percent on average this year and return to 2 percent around 2028.\n- Risks:\n - Downside risks to growth and upside risks to inflation remain significant.\n - External risks stem from the war in the Middle East; impacts depend on intensity and duration of the energy price shock.\n - High reliance on multinational enterprises (MNEs) is a structural vulnerability.\n - Geoeconomic fragmentation and elevated policy uncertainty could trigger supply-chain and capital flow shifts harmful to Ireland’s globally integrated economy.\n - Rapidly evolving AI landscape poses novel risks (cybersecurity threats, possible market corrections if AI-driven productivity expectations are revised) and upside potential (productivity gains).\n - Domestic supply-side constraints in infrastructure, housing, and labor markets could weigh on productivity." }, { "heading": "Fiscal policy — assessment and recommendations", "content": "- Overall stance:\n - A broadly neutral fiscal stance is appropriate in the near and medium term.\n - The fiscal stance in 2025-26 is assessed to be moderately expansionary.\n - Achieving a broadly neutral fiscal stance from 2027 onwards requires staying within the expenditure ceiling path in the Medium-Term Fiscal Structural Plan (MTFSP).\n- Public investment and current expenditure:\n - Support the planned scale-up of public investment to close housing and infrastructure gaps and to crowd in private investment.\n - Closely control current expenditure growth and minimize spending overruns; health and social spending have repeatedly exceeded budget allocations.\n - With the economy operating at full capacity and upside inflation risks, fiscal policy should avoid injecting unnecessary stimulus and prevent boom-bust dynamics.\n- Fiscal responses to shocks:\n - In a downside scenario of moderately lower growth and higher inflation: allow automatic stabilizers to work fully; any additional discretionary support should be time-bound, targeted and maintain the price signal. A broadly neutral fiscal stance would remain appropriate.\n - In a severe scenario with sharp growth slowdown: Ireland has fiscal space to scale up discretionary targeted support and accommodate higher deficits temporarily while deepening reforms for long-term fiscal sustainability.\n- Expenditure control measures:\n - Strengthen expenditure controls via the Comprehensive Review of Public Financial Procedures, tighter in-year monitoring, earlier intervention, and corrective actions.\n - Support the Expenditure Control and Escalation Process and upstream measures (commitment control over procurement, enhanced digitalization and integrated platforms/data).\n - Emphasize binding budget planning targets to limit expectations of additional appropriations.\n- Implementation of infrastructure plans:\n - Effective implementation of the Accelerating Infrastructure Action Plan is key; address planning and judicial review bottlenecks.\n - Support reforms to cap costs of environmental planning judicial reviews, streamline court procedures, shorten consent procedures, and eliminate dual approval processes for critical infrastructure projects.\n- Revenue and tax-base broadening:\n - Broadening the tax base recommended to reduce reliance on highly concentrated corporate income tax (CIT) revenues and to channel more excess CIT into the two savings funds.\n - Options include increasing local property tax rates; reducing the number of preferential VAT or excise rates (especially those benefiting higher-income earners); reducing broad-based personal income tax (PIT) reliefs and exemptions.\n - Consider introducing additional PIT bands with appropriately calibrated rates and replacing the Pay Related Social Insurance and Universal Social Charge thresholds with gradual phase-ins to strengthen work incentives; mitigate regressivity with means-tested transfers.\n- Strengthening the national fiscal framework:\n - Recommend adopting a credible and binding fiscal rule, preferably anchored in a long-term net debt target, operationalized through multi-year net expenditure ceilings.\n - Advise legislating the national fiscal framework and assigning the IFAC a central role.\n - Recommend the MTFSP guide annual budgets and act as a binding mechanism on spending ceilings over the medium term." }, { "heading": "Financial sector policy — assessment and recommendations", "content": "- Systemic environment:\n - Systemic risks have risen amid tightening global financial conditions and a volatile external environment.\n - Global tightening reflects markets pricing in higher inflation, slower growth, and negative sentiment; risks concentrate largely in large non-bank financial institutions (NBFI).\n - Equity valuations appear stretched, raising concerns about abrupt corrections and mispricing of risk.\n - Domestically, concentration risks persist due to reliance on a small set of globalized sectors; digitalization, cyber threats, and reliance on external providers add complexity.\n- Banking sector:\n - Banking sector remains resilient: profitability moderated but remains above pre-pandemic levels; capital positions strengthened and are above regulatory requirements; liquidity is sound; asset quality has continued to improve.\n - Vulnerabilities persist in leveraged finance to firms and the commercial real estate sector.\n - Supervisory focus should keep asset quality under close watch given macro risks and geopolitical escalation risks.\n - Evolving risks from digitalization and cybersecurity, accelerated by developments in frontier AI models, require ongoing attention.\n - Monitor the impact of the EU's Sixth Capital Requirements Directive (CRD6) on non-EU banks and implications for EU banks’ business models and cross-border activity.\n- Macroprudential policy:\n - Current settings remain appropriate; the Central Bank of Ireland (CBI) should stand ready to adjust them if conditions worsen.\n - The counter-cyclical capital buffer (CCyB) rate is maintained at 1.5 percent — a level consistent with cyclical risk conditions being neither elevated nor subdued.\n - Recommend continued stress testing and review/adjustment of macroprudential settings as warranted; consider use of releasable capital buffers if downside risks impair credit provision.\n- Non-bank financial sector (NBFI):\n - Strengthen regulation and supervision of non-banks; this is a key priority for the CBI.\n - Continue engagement with international community, ESMA, and other NCAs; monitor implementation of macroprudential measures for Irish property funds and GBP-denominated liability-driven investment funds.\n - Maintain leadership in developing a macroprudential framework for non-banks and improve data availability/quality to enable system-wide stress tests." }, { "heading": "Structural policy — assessment and recommendations", "content": "- Housing supply:\n - Persistent housing shortages require renewed efforts to boost supply.\n - Progress noted (pickup in housing completions; shift toward higher density) but achieving new housing targets requires further reforms, including streamlining planning and judicial review processes.\n - Enhance apprenticeship and training programs to alleviate construction sector skill shortages; crowd in private capital via planning certainty and infrastructure.\n - New Rent Control Framework introduces predictability and flexibility for rentals; IMF recommends removing rent controls to further boost rental supply while continuing to support vulnerable households.\n- Energy security and green transition:\n - Sustained productivity growth requires reliable and competitively priced low-carbon energy.\n - Electricity infrastructure bottlenecks impede investment and growth; government has prioritized grid upgrading.\n - Meeting energy demand (including rapidly growing AI-related needs) requires additional generation, reinforced infrastructure, and broader carbon pricing coverage.\n - Strengthening integration with the EU energy market, including the grid, is key to bolstering security of supply.\n - Ireland has immense potential for offshore renewable energy; harnessing this alongside improved transmission and storage is crucial for energy security, competitiveness, and a cost-effective green transition.\n- Labor market and AI:\n - Ireland is relatively more exposed to AI because of concentration in ICT, financial services, and knowledge-intensive industries.\n - Realizing AI productivity gains requires continuous reskilling and upskilling; labor demand will shift toward advanced digital and analytical skills.\n - Reforms to foster innovation and growth, policies to help workers adapt and acquire new skills, and enhanced labor mobility (including through affordable housing) are recommended to protect inclusive growth.\n- Deepening the EU Single Market:\n - A more integrated EU Single Market would allow Irish firms to expand with fewer frictions, leverage economies of scale, and boost financing for start-ups.\n - Deeper integration would enhance resilience to supply-chain and trade shocks, and new EU trade agreements would help diversify supply chains.\n - The Savings and Investments Union could facilitate redirection of savings into productive investments and increase household wealth and resilience.\n - Ireland’s financial sector is well-positioned to lead in asset management; the proposed 28th corporate regime, if well designed and implemented, could improve Irish firms’ efficiency in the Single Market.\n - Simplifying regulations and creating a single set of rules would facilitate deeper integration, cross-border activity, and economies of scale." }, { "heading": "Concluding policy priorities (concise bullets)", "content": "- Fiscal:\n - Achieve a broadly neutral fiscal stance; accelerate public investment while controlling current expenditure growth and minimizing spending overruns.\n - Broaden the tax base to reduce reliance on highly concentrated corporate income tax.\n - Strengthen the national fiscal framework and budget credibility (legislate a credible, binding fiscal rule, preferably anchored in a long-term net debt target; assign IFAC a central role; use MTFSP as a binding guide).\n- Financial:\n - Maintain close monitoring of financial stability risks; stand ready to adjust macroprudential settings (CCyB at 1.5 percent) as warranted.\n - Continue strengthening regulation and supervision of the non-bank financial sector and address data gaps.\n- Structural:\n - Boost housing supply (streamline planning/judicial review, enhance skills, crowd in private capital, reassess rent controls).\n - Enhance energy security and stay the course on the green transition while integrating further with the EU energy market.\n - Prepare workers for AI through reskilling/upskilling and policies to support labor mobility.\n - Support deepening of the EU Single Market to increase resilience, scale, and financing opportunities.\n\nIMF staff concluding statement following the 2026 Article IV mission to Ireland (May 25, 2026).\n\n---\n\n\n References\n\n- Ireland and the IMF\n- IMF Policy Advice -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- Article IV\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission" } ], "bullets": [ "[Markdown version](/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/index.md)", "[Structured JSON version](/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/index.json)", "[Bundle manifest](/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/bundle-manifest.json)", "Published: May 25, 2026", "Date: May 25, 2026.", "The Irish economy has maintained strong performance despite trade and geopolitical tensions and elevated uncertainty.", "Given Ireland’s structural vulnerabilities and rising global unpredictability, current resilience “cannot be taken for granted.”", "Policy emphasis: prioritize temporary and targeted measures for vulnerable groups in response to the war in the Middle East, and avoid broad-based measures such as tax cuts, subsidies, and price controls.", "The mission identifies three broad policy priority areas: Fiscal, Financial, and Structural.", "Baseline projection assumptions: consistent with the energy futures prices as of May 12th and the IMF April 2026 World Economic Outlook reference scenario.", "Growth projections:", "Inflation projections:", "Risks:", "Overall stance:", "Public investment and current expenditure:", "Fiscal responses to shocks:", "Expenditure control measures:", "Implementation of infrastructure plans:", "Revenue and tax-base broadening:", "Strengthening the national fiscal framework:", "Systemic environment:", "Banking sector:", "Macroprudential policy:", "Non-bank financial sector (NBFI):", "Housing supply:", "Energy security and green transition:", "Labor market and AI:", "Deepening the EU Single Market:", "Fiscal:", "Financial:", "Structural:", "[Ireland and the IMF](http://www.imf.org/external/country/IRL/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Mission Concluding Statements](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[Article IV](https://www.imf.org/external/pubs/ft/aa/index.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/index.md", "json": "/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/index.json", "bundleManifest": "/en/news/articles/2026/05/25/mcs052526-ireland-staff-concluding-statement-2026-article-iv-mission/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T04:41:22.776Z" }