The Central Bank of Ireland has projected continued growth for the Irish economy in 2025, despite potential risks stemming from global trade changes and economic policies under the incoming US President Donald Trump [2cafd05e]. The Modified Domestic Demand (MDD) has shown robust performance, growing by over 3% in the first nine months of 2024, which is a positive indicator for the economy [2cafd05e].
Employment figures have also been encouraging, with an increase of 88,400 persons contributing to a stable unemployment rate of 4.5% [2cafd05e]. The Central Bank forecasts that inflation will average around 1.8% from 2025 to 2027, although services inflation is expected to be higher at 3.1% [2cafd05e].
However, the bank has cautioned that changes in US economic policy, particularly those anticipated from the Trump administration, could have negative repercussions for Ireland's economy [2cafd05e]. Additionally, the Central Bank has highlighted the need to widen the tax base due to an ageing population, which poses long-term sustainability challenges [2cafd05e].
Robert Kelly, the Director of Economics and Statistics at the Central Bank, emphasized the importance of developing sustainable infrastructure to attract and retain foreign investment, which is crucial for maintaining economic growth [2cafd05e]. As the Irish economy navigates these challenges, the interplay of domestic growth and international economic policies will be critical in shaping its future trajectory [2cafd05e].