Ireland: 2026 Article IV Consultation-Press Release; and Staff Report

The 2026 Article IV Consultation discusses that the Irish economy has remained resilient in the face of consecutive external shocks. The economy is projected to grow at a slower but still robust pace. Private consumption is expected to slow down due to weaker employment and real income growth. Modified investment is projected to normalize from the high 2025 level and would be supported by continued construction activity. Export growth is expected to slow significantly in 2026 and the current account surplus to moderate over the medium term. Risks to the growth outlook are on the downside and to inflation on the upside. Substantial external risks stem from the war in the Middle East, contingent on the war’s intensity and duration. Structural reforms should focus on addressing housing shortages, enhancing energy security, and preparing for the AI transformation. Achieving the new housing targets will require further efforts to streamline the complex planning and judicial review process, increase urban density, boost construction productivity, and crowd in private capital. Upgrading the electricity grid, strengthening integration with the EU energy market, and harnessing Ireland's potential in renewables are key to bolstering energy security and delivering a cost-effective green transition.