European Commission Spring 2026 Forecast: Irish GDP to Contract 1.2% in 2026 (economy-finance.ec.europa.eu)

• Irish GDP forecast to contract 1.2% in 2026 after 12.3% growth in 2025 due to pharmaceutical export frontloading.
• Inflation projected at 3.5% in 2026, driven by energy price shock, easing to 2.6% in 2027.
• Budget surplus narrowing to 1.4% of GDP in 2026; corporate tax concentration remains a key risk.

"The European Commission's Spring 2026 forecast projects Irish GDP will decline by 1.2% in 2026, largely due to the base effect from front-loaded pharmaceutical exports in 2025, which boosted GDP by 12.3%. Domestic demand remains resilient with modified domestic demand growing 2.8% in 2026. Inflation is forecast to rise to 3.5% driven by higher energy prices, before easing to 2.6% in 2027. The budget surplus is expected to narrow to 1.4% of GDP in 2026, with corporate tax receipts buoyant but vulnerable to external risks."