Economy Experiencing ‘Moderation’ in Growth With Slowing Employment, Ibec Says

Ireland’s Economic Growth: Navigating Moderation and Challenges

The Irish economy is feeling the shift from its recent period of rapid growth, a trend characterized as “moderation” by the Irish Business and Employers Confederation (Ibec).This transition is reflected in their projections, forecasting GDP growth to slow to 1.7% this year and 2.1% in 2026.

While this moderation is not unexpected, given the current global economic climate and the challenges faced by some of Ireland’s key trading partners, it does raise important questions about the future trajectory of the Irish economy.

Danny McCoy, Ibec’s chief executive, recognizes this shift. “Employment by the end of 2025 will be almost 500,000 higher than it was in 2019. growth is showing signs of moderating domestically. This is to be expected given the pace of recent years and a challenging global outlook,” he explains.

The Ibec report paints a picture of a global landscape characterized by uncertainty and volatility. Europe, in particular, faces significant hurdles in adapting its business model to new realities in trade and energy costs. The report predicts that european growth will likely remain below 1% in 2025.

The impact of the new US administration’s trade policies on Ireland remains a significant unknown. “It remains to be seen how the new US administration would prioritize between competing domestic and trade policy goals,” says McCoy. However, he notes that the strength of the US dollar might mitigate the potential negative impact of any new trade policies on Ireland.

Despite these challenges, Ibec remains optimistic about Ireland’s future economic prospects. McCoy emphasizes Ireland’s strong fundamentals and its ability to adapt and innovate. “We have a dynamic and competitive economy, and we are well-positioned to weather the current global storms,” he says.

Looking ahead, the Irish government faces a number of crucial decisions that will shape the nation’s economic future. These include addressing domestic barriers to growth, fostering innovation and entrepreneurship, and ensuring that Ireland remains a competitive location for businesses to invest and grow. Ireland’s ability to navigate these challenges effectively will determine its success in maintaining its economic competitiveness in the years to come.

Ireland’s Economic Outlook: Navigating Challenges and Growth Opportunities

Ireland’s economic journey is poised for a period of moderation, according to Ibec’s latest economic outlook report. The report anticipates a slowdown in GDP growth,with projections settling at 1.7% for this year and 2.1% in 2026. Danny McCoy, CEO of Ibec, the leading representative body for Irish business, recently sat down with Archyde to delve into these trends and the obstacles lying ahead.

“While nobody welcomes a slowdown in growth,” McCoy acknowledged, “this moderation isn’t entirely unexpected considering the rapid expansion we’ve witnessed in recent years and the challenging global climate.” He pointed to the remarkable employment growth of almost 500,000 as 2019 as a testament to Ireland’s economic prowess, but emphasized that a natural easing of growth is to be expected after such a surge.

Despite the positive track record, McCoy identified several global pressures impacting Ireland’s economic landscape. “Europe’s struggle to adapt its business habitat,” he stated, “presents a significant challenge.” International uncertainties, coupled with the rising cost of capital, pose a threat to business investment.

Looking inward, Ibec highlights domestic challenges as the primary barriers to Ireland’s growth. A recent EU report pinpoints issues like high energy costs,project delays,regulatory burdens,and an incomplete single market as significant roadblocks.These domestic hurdles, according to the Ibec report, are “stunting business investment” and threatening Ireland’s competitive edge.

“The main barrier for Ireland is our capacity to deliver projects effectively,” the report stresses.

Despite these obstacles, Ibec remains optimistic about Ireland’s future.”Ireland has clear potential to remain competitive in the coming years,” the report asserts, citing a skilled and growing workforce, a reputation for openness, a stable political environment, abundant energy potential, and a commitment to improving national infrastructure.

McCoy emphasized the need for decisive action from the new government to unlock Ireland’s full economic potential. “It is indeed indeed critical,” McCoy stated, “that key commitments in the new programme for government for an action plan for competitiveness and productivity, measures to enhance the speed and effectiveness of infrastructure delivery, and reducing redundant or excessive regulatory burdens on business are advanced with a clear sense of purpose and a renewed energy by the new government.”

Ireland’s Economic Outlook: Navigating challenges and Harnessing opportunities

Ireland’s economy, long a beacon of stability and growth within Europe, now faces a confluence of global and domestic headwinds. Amidst rising energy costs, evolving trade landscapes, and new geopolitical realities, questions abound about Ireland’s ability to maintain its economic momentum.

IBEC Chief Executive Danny McCoy acknowledges these challenges, noting the meaning of soaring energy prices and the evolving trade policies of the new US administration. “The strength of the dollar may mitigate some of these impacts,” he states,”but Ireland’s continued success hinges on maintaining its reputation for a stable tax and business environment.”

Domestic Barriers to Growth

Recent reports, including a comprehensive one from the EU, have identified key domestic barriers hindering Ireland’s growth potential.McCoy emphasizes the critical need to address these issues head-on. “High energy costs, project delays, overly burdensome regulations, and an incomplete single market are all significant obstacles we face,” he explains. The EU report underscores the urgency of improving Ireland’s capacity to deliver projects effectively, a concern echoed by McCoy. he stresses that rising capital costs coupled with uncertainty and delays stifle business investment,further jeopardizing growth prospects.

Maintaining Optimism Amidst Challenges

Despite these hurdles, IBEC remains cautiously optimistic about Ireland’s future. McCoy points to several key strengths that provide a foundation for success. “Ireland boasts a skilled and growing workforce, a reputation for openness and innovation, a stable political environment, abundant energy potential, and a commitment to improving national infrastructure,” he explains.

McCoy hails the new government’s plans for competitiveness, productivity, and infrastructure delivery as a source of encouragement. “With the right actions, we can unlock our economic potential,” he asserts, emphasizing the importance of translating these plans into tangible progress.

Prioritizing Actions for Continued Growth

Looking ahead, McCoy emphasizes the need for a focused and decisive approach. “It is indeed crucial,” he stresses, “that the new government prioritizes its commitments to enhance infrastructure delivery, reduce regulatory burdens, and boost competitiveness and productivity.” he believes a clear sense of purpose, coupled with renewed energy behind these initiatives, will be essential to driving Ireland’s economic success in the years to come.

A Defining Moment for Ireland’s Economic Future

As Ireland navigates these turbulent economic times, the choices made by the new government will be crucial in shaping its future. How effectively they address these domestic barriers and continue to position Ireland as a competitive global player will determine whether the nation can maintain its economic momentum.

What are teh primary barriers to Ireland’s growth according to Danny McCoy?

Archyde Exclusive: Danny McCoy on Ireland’s Economic Landscape

Archyde sits down wiht Danny McCoy, Chief executive of Ibec, Ireland’s leading business representative group, to discuss the Irish economy’s trajectory, challenges, and opportunities.

Archyde (A): Danny, thank you for joining us today. Let’s start with the slowdown in economic growth.GDP growth projections for this year and 2026 stand at 1.7% and 2.1% respectively. Is this a cause for concern?

Danny McCoy (DM): Thank you for having me. While nobody welcomes a slowdown in growth, this moderation isn’t entirely unexpected. Ireland has experienced remarkable growth in recent years, with employment increasing by almost 500,000 since 2019. Given the challenging global outlook, it’s natural for growth to ease from these high rates.

A: the Ibec report paints a global picture of uncertainty and volatility. How dose this impact Ireland?

DM: indeed, the global landscape presents meaningful challenges. Europe, in particular, faces hurdles in adapting its business model to new trade and energy cost realities. We expect European growth to remain below 1% in 2025. Simultaneously occurring, the new US administration’s trade policies could have implications for Ireland. However, the strength of the US dollar might mitigate any negative impacts.

A: Turning to domestic challenges, what are the primary barriers to Ireland’s growth?

DM: Domestically, our capacity to deliver projects effectively is the main barrier. High energy costs, project delays, regulatory burdens, and an incomplete single market are significant roadblocks that could stunt business investment and threaten our competitive edge.

A: Despite these challenges,Ibec remains optimistic about Ireland’s future prospects. What gives you this confidence?

DM: Ireland has strong fundamentals. We have a skilled, growing workforce, a reputation for openness, stable political environment, abundant energy potential, and a commitment to improving infrastructure. We’re well-positioned to weather global storms and remain competitive.

A: Looking ahead, what crucial decisions does the Irish government need to make to secure Ireland’s economic future?

DM: The new government must prioritize an action plan for competitiveness and productivity, enhance infrastructure delivery, and reduce needless regulatory burdens on business. Decisive action in these areas will be critical to unlocking Ireland’s full economic potential.

A: Danny, thank you for your insights. We look forward to seeing Ireland navigate these challenges and harness the opportunities that lie ahead.

DM: My pleasure. Ireland has weathered storms before, and with the right policies, we’ll continue to do so. Thank you.