IMF Executive Board Concludes 2026 Article IV Consultation with Ireland

IMF News, June 29, 2026

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IMF Executive Board Concludes 2026 Article IV Consultation with Ireland

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Bibliographic details

• Published: June 29, 2026

Overview and recent performance

• The Irish economy "has remained resilient in the face of consecutive external shocks."
• Modified Gross National Income is estimated to have grown by about 4 percent in 2025.
• Real GDP (non-seasonally adjusted) growth:
  • 2022: 7.5
  • 2023: -2.5
  • 2024: 2.6
  • 2025: 12.3
  • 2026: -0.8
  • 2027: 3.7
  • 2028: 2.9
  • 2029: 2.4
  • 2030: 2.3
• Drivers in 2025: robust consumption and investment, and strong exports dominated by foreign multinational enterprises (MNEs).
• Headline inflation remained close to 2 percent in 2025 but has accelerated recently due to higher energy prices.
• Employment growth slowed and the labor market has become less tight.
• The general government balance remained in a sizeable surplus in 2025, supported by continued strong corporate income tax receipts from MNEs.

Outlook and projections

• Growth is projected to slow but remain healthy amid trade and geopolitical tensions and elevated global uncertainty.
• Modified domestic demand growth is projected to moderate from almost 5 percent in 2025 to about 2½ percent in 2026–27.
• Projections for inflation and output:
  • Headline inflation is projected to rise to about 3½ percent in 2026 and return to 2 percent around 2028.
• Sectoral outlook:
  • Private consumption expected to slow due to weaker employment and real income growth.
  • Modified investment projected to normalize from the high 2025 level and be supported by continued construction activity.
  • Export growth expected to slow significantly in 2026 and the current account surplus to moderate over the medium term.
• Ireland’s external position is preliminarily assessed to be moderately stronger than the level implied by medium-term fundamentals and desirable policies.

Risks and vulnerabilities

• Downside risks to growth and upside risks to inflation.
• Substantial external risks stem from the war in the Middle East, contingent on its intensity and duration.
• Continued reliance on MNEs is a key vulnerability.
• Rising geoeconomic fragmentation and elevated policy uncertainty could lead to reorganization of supply chains and shifts in trade and capital flows detrimental to Ireland’s globally integrated economy.
• Rapidly evolving AI landscape poses novel risks, including threats to cyber security.
• Domestic risks: persistent supply-side constraints could weigh on productivity.

Fiscal policy guidance

• Fiscal policy should achieve a broadly neutral stance while scaling up public investment efficiently.
• Rationale:
  • Economy operating at full capacity and upside inflation risks; fiscal policy should avoid injecting unnecessary demand stimulus.
  • A broadly neutral stance would help build buffers for future shocks and spending needs from aging and the green transition.
• Automatic stabilizers should be allowed to operate fully if downside risks materialize.
• Any discretionary fiscal support should be temporary, targeted, preserve price signals, and be accommodated within a broadly neutral fiscal stance, except in a severe downside scenario.
• Staff welcomes the authorities’ commitment to accelerating public investment; effective implementation will be key.
• Current expenditure needs close management, including stronger controls to minimize overruns.

Tax policy and fiscal framework recommendations

• Broadening the tax base and strengthening the national fiscal framework would reduce vulnerability to the highly concentrated CIT and help prepare Ireland for long-term challenges.
• Specific revenue recommendations:
  • Increase revenues from PIT, VAT, and local property taxes to provide more sustainable revenue sources for permanent spending commitments.
  • Channel more excess CIT revenues into the two savings funds.
• Governance recommendation:
  • With no fiscal anchor at present, the MTFSP should guide annual budgets and act as a binding mechanism on spending ceilings over the medium term.

Financial stability and non-bank sector

• Systemic risks have risen, warranting ongoing vigilance to safeguard financial stability.
• The financial system has proven resilient to external shocks, but vulnerabilities exist in segments of Ireland’s large and complex non-bank sector related to leverage and liquidity mismatches.
• Supervisory focus:
  • Asset quality should remain a key supervisory focus for banks.
  • Macroprudential settings are appropriate; the CBI should continue to review and adjust them as macro-financial conditions develop.
  • Operational resilience: evolving risks from digitalization and cybersecurity require continued focus.
• Strengthening regulation and supervision of non-banks:
  • The CBI should maintain its leadership role in developing a macroprudential framework for non-banks.
  • Continue monitoring implementation of macroprudential measures for Irish property funds and GBP-denominated liability-driven investment funds.
  • Ongoing efforts with ESMA and other regulators to improve data availability and quality, enhance risk assessment, and develop system-wide stress tests are welcome.

Structural reforms and strategic priorities

• Priorities: address housing shortages, enhance energy security, and prepare for the AI transformation.
• Housing policy actions:
  • Achieving new housing targets will require streamlining the complex planning and judicial review process, increasing urban density, boosting construction productivity, and crowding in private capital.
• Energy policy actions:
  • Upgrade the electricity grid, strengthen integration with the EU energy market, and harness renewables to bolster energy security and deliver a cost-effective green transition.
• AI and labor market:
  • Realize AI-related productivity gains while ensuring adjustment does not undermine inclusive growth.
  • Policies needed to help workers adapt and acquire new skills, enhance labor mobility, and foster innovation to leverage Ireland’s abundant talent.

EU Single Market and international integration

• The Irish economy would benefit significantly from deepening the EU Single Market.
• The SIU can facilitate the redirection of savings into productive investments; Ireland’s financial sector, a global leader in asset management, is positioned to lead the transition.
• The proposed 28th corporate regime, if designed and implemented well, could enable Irish firms to operate more efficiently in the Single Market and bring economies of scale.
• Advancing new EU trade agreements would allow Irish firms to diversify supply chains and capture efficiency gains from trade.

Selected economic indicators (highlights)

• Real GNI* (growth rate):
  • 2022: 3.3
  • 2023: 5.7
  • 2024: 4.8
  • 2025: 4.0
  • 2026: 2.0
  • 2027: 2.7
  • 2028: (not listed in growth series for GNI*)
• Modified domestic demand (percentage change) 5/:
  • 2022: 8.4
  • 2023: 6.2
  • 2024: 4.9
  • 2025: (almost) 5 (described in text)
• Inflation (HICP):
  • 2022: 8.1
  • 2023: 5.2
  • 2024: 2.1
• Employment (% changes of level, ILO definition):
  • 2022: 6.9
  • 2023: 1.1
• Unemployment rate (percent):
  • 2022: 4.3
  • 2023: 5.1
• Public finance (percent of GDP) — Revenue:
  • 2022: 22.3
  • 2023: 23.6
  • 2024: 26.5
  • 2025: 22.7
  • 2026: 23.5
  • 2027: 23.4
  • 2028: 24.0
  • 2029: 24.3
• General government gross debt (percent of GNI*):
  • 2022: 83.9
  • 2023: 75.2
  • 2024: 67.1
  • 2025: 62.2
  • 2026: 59.2
  • 2027: 55.8
  • 2028: 53.4
  • 2029: 51.5
  • 2030: 49.6
  • 2031: 48.4
• Trade balance (goods) (percent of GDP):
  • 2022: 39.4
  • 2023: 29.9
  • 2024: 31.2
  • 2025: 36.1
• Current account balance (percent of GDP):
  • 2022: 8.8
  • 2023: 7.0
  • 2024: 16.2
  • 2025: 8.2
  • 2026: 7.8
  • 2027: 7.6
  • 2028: 7.2
  • 2029: 7.1
• Gross external debt (excl. IFSC) (percent of GDP):
  • 2022: 187.7
  • 2023: 175.7
  • 2024: 154.2
  • 2025: 130.8
  • 2026: 125.5
  • 2027: 114.2
  • 2028: 105.6
  • 2029: 98.3
  • 2030: 91.8
  • 2031: 85.9
• Nominal GDP (€ billions):
  • 2022: 520.7
  • 2023: 524.7
  • 2024: 562.8
  • 2025: 638.7
  • 2026: 645.2
  • 2027: 685.1
  • 2028: 715.6
  • 2029: 745.1
  • 2030: 775.4
  • 2031: 807.6
• Nominal GNI* (€ billions):
  • 2022: 266.7
  • 2023: 291.4
  • 2024: 321.1
  • 2025: 337.3
  • 2026: 350.5
  • 2027: 368.3
  • 2028: 383.4
  • 2029: 399.2
  • 2030: 415.5
  • 2031: 432.9

Sources cited in the report: CSO, DoF, Eurostat, and IMF staff estimates and projections.

Italic: IMF Communications Department, Press Release No. 26/225; Executive Board concluded the 2026 Article IV Consultation with Ireland on a lapse-of-time basis.

References

• Ireland and the IMF
• IMF Policy Advice -- A Factsheet
• Press Releases
• PRESS CENTER
• https://www.imf.org/en/home