Irish Fiscal Council June 2025 Report: Economy Strong but Reliant on Volatile Corporation Tax (fiscalcouncil.ie)

• Record employment: 85% of prime-age workers employed.
• Structural deficit of 2.4% of GNI* when volatile corporation tax is excluded.
• Spending growth at 7.8% vs. 5.9% budgeted, risking €2 billion overrun.

"The Irish Fiscal Advisory Council's June 2025 assessment finds the economy robust with record employment (85% of 25-54 age group working) and low debt. However, the budget surplus is heavily dependent on corporation tax from a few large US firms. Excluding this excess tax, Ireland would have a structural deficit of 2.4% of GNI* (over €2,500 per worker). Government spending is growing at 7.8% annually, far exceeding the 5.9% budgeted, risking €2 billion overruns. The report criticizes the lack of an effective fiscal framework: EU rules are ill-suited, no domestic fiscal rule exists, and spending ceilings for 2026/27 are missing. Trade tensions and tariffs pose further risks."