Ireland’s economy is expected to grow by just over 2% per year over the next decade, according to a new projection from the Economic and Social Research Institute (ESRI). The report highlights the country’s resilience to past shocks, including Brexit, the Covid-19 pandemic, and spikes in energy prices, while warning that the economy remains vulnerable to external risks.
The study assumes a baseline annual growth rate of 2.3% until 2030, slowing slightly to 2.1% for the following five years. ESRI Director Martina Lawless emphasised that the projection is not a forecast, but a baseline scenario that does not account for unexpected shocks. “The baseline projection of our economic outlook is one of sustained but moderating growth rates over the next decade,” she said.
The report examines how Ireland could be affected under different economic scenarios. In the event of a global slowdown, a 5% drop in demand for Irish exports could reduce national income by 3.2% and lower consumer spending by 6.4% by 2030. A loss of competitiveness could see incomes fall by 5% and consumer spending drop 8.6%. A decline in foreign direct investment could lead to a 2.5% reduction in employment and push unemployment up by 1.5%.
Conversely, an increase in productivity could boost gross national income by 2.4% above the baseline projection. The study underlines Ireland’s dependence on multinational corporations for both employment and corporate tax revenue, noting this reliance as a key source of vulnerability to global economic changes, including shifts in US trade policy.
Lawless said the study also highlights long-term challenges, including the effects of an ageing population and climate change costs after 2035. “Investment in education, public infrastructure, research and development are critical to mitigate the risks and place the country in a strong position to take advantage of opportunities,” she stated.
On RTÉ’s Morning Ireland, Lawless acknowledged the uncertainty of a ten-year horizon but expressed cautious optimism about continued growth. She said the study focuses on potential shocks and vulnerabilities to help policymakers identify the areas that present the greatest risks to the economy.
The ESRI report is part of the institute’s regular Economic Outlook, offering insights into Ireland’s likely performance under different conditions rather than predicting exact outcomes. Analysts and government officials can use the findings to plan for a range of scenarios, from global downturns to productivity gains, and to guide decisions on investment and public policy.
