Employment in Ireland is expected to continue growing over the next two years, but at a slower pace than in recent years, according to the latest economic forecast from the Department of Finance. While the outlook remains positive overall, potential trade tensions, especially ongoing US tariffs, could significantly reduce job creation.<\/p>\n
In particular, the Department warns that if the current 10% tariffs imposed by the United States remain in place, Ireland could see up to 25,000 fewer jobs created over the next two years. Minister for Finance Paschal Donohoe said this is consistent with earlier projections that estimated a reduction of between 50,000 and 80,000 jobs over a five-year period due to the impact of these tariffs.<\/p>\n
This year\u2019s economic forecast, which forms part of Ireland\u2019s annual reporting obligations to the European Union, is shorter than usual, covering just a two-year window instead of the standard five. The Department cited the global economic uncertainty, driven largely by trade policy shifts, as the reason for the limited scope. Some other EU member states have reportedly opted not to submit forecasts at all for the same reason.<\/p>\n
Despite these challenges, Donohoe noted the resilience of Ireland\u2019s labour market, stating that job creation remains strong and continues to underpin public finances.<\/p>\n
\u201cWe are in a place of very strong performance in terms of the number of jobs within the economy and the health of the labour market,\u201d he said. \u201cThe tax revenues that are created by the health of our labour market continue to be the anchor for how our public finances are performing.\u201d<\/p>\n
According to the Department\u2019s baseline forecast, excluding any tariff impact, Irish GDP is expected to grow by 4.1% this year and by 3.4% in 2026. Domestic economic growth is projected at 2.5% this year and 2.8% next year. However, if tariffs remain in place, the Department estimates a reduction of 1.5 percentage points in GDP, a 1 point drop in domestic growth, and a 0.5 point decrease in employment growth.<\/p>\n
The forecast also anticipates a budget surplus of \u20ac8.7 billion in 2025 and \u20ac6.3 billion in 2026, assuming corporation tax receipts remain stable. However, the Department has flagged a potential reversal in these receipts as a key risk to future economic performance.<\/p>\n
For employers and jobseekers alike, this forecast underscores the importance of preparing for an evolving global labour landscape. While the Irish job market continues to demonstrate strength, external factors, particularly international trade policy, will play a growing role in shaping future opportunities.<\/p>\n
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