The International Monetary Fund Executive Board completed its Article IV consultation with Ireland and endorsed the staff appraisal on a lapse-of-time basis. The assessment says the Irish economy remained resilient, with modified gross national income estimated to have grown by about 4 percent in 2025, but growth is expected to slow while remaining robust as private consumption, investment and export growth moderate. Headline inflation, which stayed close to 2 percent in 2025, is projected to rise to about 3.5 percent in 2026 before returning to 2 percent around 2028. The IMF said risks are tilted to weaker growth and higher inflation, reflecting higher energy prices, global uncertainty, the war in the Middle East, geoeconomic fragmentation and Ireland’s dependence on foreign multinational enterprises. The IMF urged a broadly neutral fiscal stance, arguing that with the economy operating at full capacity and inflation risks on the upside, policy should avoid adding unnecessary demand. It called for efficient scaling up of public investment, tighter control of current spending, and full operation of automatic stabilizers if downside risks materialize, with any discretionary support kept temporary and targeted. The appraisal also pressed for broader tax bases in personal income tax, value-added tax and local property taxes, more excess corporate income tax revenues to be directed to the two savings funds, and a stronger fiscal framework in which the Medium-Term Fiscal-Structural Plan serves as a binding guide for medium-term spending ceilings. On financial stability, the IMF said systemic risks have increased even though the financial system has remained resilient. It highlighted leverage and liquidity mismatches in parts of Ireland’s large non-bank sector, said bank asset quality should remain a supervisory priority, and judged current macroprudential settings appropriate while calling on the Central Bank of Ireland to keep reviewing them as conditions change. The appraisal also called for continued work on non-bank regulation and supervision with international counterparts, alongside structural reforms to ease housing shortages, strengthen energy security and prepare workers and firms for the effects of artificial intelligence.
International Monetary Fund2026-06-29
International Monetary Fund completes Ireland Article IV consultation and backs neutral fiscal policy as MNE reliance and non-bank risks persist
The International Monetary Fund completed its Article IV consultation with Ireland and said the economy remains resilient, though growth is set to slow and inflation is expected to rise in 2026 before easing back to target. It urged broadly neutral fiscal policy, a wider tax base and a stronger fiscal framework. The IMF also flagged vulnerabilities from multinational enterprise concentration and parts of the non-bank financial sector, while calling for reforms on housing, energy and AI readiness.