DUBLIN, Dec 19 (Reuters) – Ireland’s central bank on Friday raised its forecasts for domestic economic growth, saying the impact of U.S. economic policies had so far been relatively benign and consumer spending steadier than expected.
Ireland is one of the countries most exposed to President Donald Trump’s efforts to force firms to boost their operations inside the United States, with a significant proportion of Irish employment, tax receipts and exports dependent on a cluster of mainly tech and pharmaceutical U.S. multinationals.
But so far the Irish economy has proven “really, really resistive” to the expected economic headwinds, said Robert Kelly, Director of Economics and Statistics.
Modified domestic demand (MDD) – a gauge of economic performance that strips out the distorting effects of multinational firms – is expected to grow by 3.9% this year, the central bank said in its quarterly report, up from a forecast of 2.9% three months ago.
Domestic economic growth will slow to 3.0% in 2026 and 2.8% in 2027, it forecast, both upgrades from September.
The upward revision was in part due to a stronger outlook for multinational investment, construction activity and government expenditure, the report said.
Adjustments by foreign multinationals in Ireland in response to the new environment have so far been relatively benign, Kelly said.
The report also said inflation is expected to increase from 2.1% this year to 2.3% next year with risks tilted to the upside.
(Writing by Conor Humphries editing by William James)
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