🔹 Economic Context
Global trade tensions are escalating, with new tariffs (10%) from the US on EU goods, negatively affecting Irish exports.
Signs of structural global economic shifts: increased protectionism, economic fragmentation, and weakening multilateralism.
Irish economy has remained strong post-pandemic: 440,000 jobs added; economy at full employment.
However, uncertainty is prompting firms to delay investments and households to increase savings.
🔹 Key Fiscal Themes
Budget 2026 includes a total package of €9.4 billion:
€1.5 billion in tax reductions
€7.9 billion in public spending increases
Focus is on investment over consumption: priority given to housing, infrastructure, and economic resilience.
Headline budget surplus exists but is largely dependent on a few large corporate taxpayers—posing fiscal vulnerability.
Establishment and capitalisation of two sovereign wealth funds:
Future Ireland Fund – for ageing population and long-term challenges.
Infrastructure, Climate and Nature Fund – buffer for economic downturns and climate investment.
🔹 Public Expenditure Strategy
Total spending for 2026 set at €116.6 billion:
€97.5 billion in current expenditure
€19.1 billion in capital investment
Additional €5.5 billion in strategic equity/funding to support housing, water, transport, and energy infrastructure.
🔹 Risks and Challenges
Trade disruption and geopolitical tensions are major risks to economic and fiscal stability.
Heavily concentrated corporate tax base: 10 firms contribute 57% of corporation tax.
Long-term structural challenges: ageing population, climate transition, AI integration, and ongoing global fragmentation.
🔹 Well-being and Monitoring
Ireland shows positive trends in well-being indicators, though gaps remain in health access and discrimination.
Macroeconomic imbalances (e.g., corporate debt, external vulnerabilities) are monitored closely, with no EU review triggered.