Ireland's Department of Finance presents Future Forty baseline projecting deficit near 8% of GNI* and debt at 148% by 2065

Ireland's Department of Finance published an opening statement by its Chief Economist, John McCarthy, to the Budgetary Oversight Committee summarising Future Forty, a fiscal and economic outlook to 2065 based on a no-policy-change baseline. The work is positioned as a long-term analytical lens to map structural trends and pressures on the public finances, rather than as an input to the annual budget process. The analysis covers seven scenario “deep dives” with high, central and low possibilities, generating over 2,000 outcomes, and assesses the “four Ds” of demographics, digitalisation, decarbonisation and deglobalisation alongside EU expansion and potential housing and healthcare impacts. In the central scenario, labour force growth is expected to halt and then reverse in about a decade, with slower productivity contributing to lower overall growth; GNI* per capita continues to rise but more slowly than in recent decades. Age-related pressures are a key driver of deteriorating fiscal aggregates: healthcare and long-term care costs double by the mid-2040s and continue rising, pension costs double by the mid-2040s and triple by 2060, and age-related expenditure reaches 46% of all voted expenditure by 2065; the deficit reaches just under 8% of GNI* by 2065 and debt rises to 148% of GNI*, with the statement stressing these are mechanical projections that would not be sustainable for a small open economy. The Department highlighted a “narrowing window” of at most a decade to limit fiscal costs associated with these dynamics, and indicated it will continue work on related issues and intends to publish future analysis.