Domestic economy expected to grow by 2.7% - EY forecast

Ireland's domestic economy is expected to grow by 2.7% this year, according to a forecast by tax consultancy EY.

The organisation expects inflation to be 3.1% on average this year after it rose sharply to reach 3.6% in March following surging energy prices caused by the Iran war.

EY says the number of people employed in Ireland will grow by 1.8% this year.

It says spending by households will remain strong in 2026 and rise by 2% helped by the healthy jobs market and rising wages.

EY’s chief economist Dr Loretta O’Sullivan said: "Consumer spending is a key indicator of the health of the domestic economy and even with the significant energy price impact we are still forecasting this to increase this year and next."

She added that Ireland navigated US tariffs well last year and the challenge this year will be to manage exposure to rising energy prices.

She said: "We are projecting more moderate but still decent growth this year, something many of our peer nations will not be expecting."