LONDON: Ireland’s economy is set to slow in 2026 as pharmaceutical exports moderate, according to a Bank of Ireland Group Plc forecast.
The bank sees gross domestic product (GDP) of 2.8% for 2026, compared to a forecast of 11.2% for last year off the back of pharmaceutical companies front-loading to avoid potential tariffs imposed by US President Donald Trump.
Negative GDP growth can’t be ruled out this year, if exports fall back sharply in the manufacturing hub, the bank added.
While a global trade war has the potential to damage Ireland, the bank sees new Irish production facilities and the demand for weight loss drugs ingredients produced there leading to a permanent upward shift in GDP.
Ireland’s GDP figures are typically distorted by the outsized number of international companies based there. Modified domestic demand, a measure that aims to strip out multinational activity, is expected to grow by 2.3% in 2026, which is a “more sustainable pace,” Bank of Ireland said.
“Many of the risks facing Ireland may be external (Trump, tariffs, etc), but a key concern is that competitiveness pressures and infrastructural bottlenecks may act as an ever more pressing constraint on the Irish economy,” the bank’s chief economist, Conall Mac Coille, said in a statement. — Bloomberg
