Ireland's economic growth is forecast to slow to 2 percent this year if 10 percent tariffs on U.S. imports remain in place, and to 2.5 percent if they are lifted, the Treasury said on Tuesday.
The agency also warned that the economy would create 25,000 fewer jobs and that labor market growth would be slower than if the tariffs were not imposed.
Ireland is one of the countries most vulnerable to the drastic policy changes proposed by US President Donald Trump, as it relies on American multinationals for a significant share of employment, tax revenues and exports.
The updated forecasts are consistent with an estimate made before Trump's election that modified domestic demand (MDD) — a measure of the economy preferred by policymakers rather than GDP — would grow 2.9 percent in 2025 and similarly in 2026. MDD increased 2.7 percent last year.
The department said MDD growth would slow further to 1.75% next year if tariffs remain in place, or increase to 2.8% if they are removed. It also noted that the forecast horizon had been shortened to the end of 2026 due to increased uncertainty.
The paper also said employment growth would slow to 1.75% this year and to about 1% next year if trade barriers remain in place.
Ireland Irish pharmaceutical exports to the US rose sharply in March as… Read more
As an EU member, Ireland faces 10 percent tariffs on a host of exports, which could rise to 20 percent when the US's 90-day pause ends on July 8. Brussels has paused retaliatory measures to allow negotiations, but so far there has been little progress.
A study conducted in March with the Ministry of Finance found that the Republic was suffering disproportionate losses from tariffs, which, if left unchanged, could leave MDD 1.8% lower than it would otherwise be by 2032.
The state also faces additional risks from planned US tariffs on pharmaceuticals and possible US corporate tax reform, which could hurt rapidly growing corporate tax revenues that provide some of the healthiest public finances in Europe.
Separate data on Tuesday showed that concerns about future growth caused Irish consumer sentiment to fall sharply for a second month in April to its lowest level in two years.
Sourse: breakingnews.ie
