EY forecasts GDP growth of 9% in 2025 and 3.3% next year

EY Autumn Economic Forecast expects unemployment to edge higher in 2026

EY Ireland chief economist Loretta O'Sullivan said trade fragmentation is a challenge for Ireland’s economic model,

Irish GDP is expected to increase by 9% in 2025 and 3.3% in 2026, the EY Autumn Economic Forecast predicts, despite uncertainty abating somewhat with the recent EU/US trade deal.

Exports and GDP were boosted in the first half of 2025 by activity being brought forward to beat the introduction of US tariffs, but EY predicts growth momentum is likely to soften in the period ahead as households and businesses adapt to the changing external environment. After rising by 9% this year, EY expects GDP to increase by 3.3% in 2026.

Modified Domestic Demand, which focuses on the domestic economy, is expected to grow by 3.2% this year and 2.6% in 2026. EY projects employment growth in the Republic of Ireland of 2.2% this year and 1.8% next year, and although the unemployment rate is projected to edge up to 4.8% in 2026, this remains low by historical standards

EY cautioned that geopolitical tensions and the new tariff landscape are changing the operating environment for many businesses. "While the EU-US framework agreement provides a modicum of certainty for exporters amid all the global flux, the longer-term trend towards trade fragmentation is a challenge for Ireland’s economic model,” said EY Ireland chief economist Dr Loretta O’Sullivan.