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Corporation tax hike to 20% could leave EUR14bn hole in public finances by 2030

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  Published in Business and Finance on Tuesday, October 7th 2025 at 12:38 GMT by Irish Examiner
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Ireland’s Economy at a Crossroads: Growth, Inflation, and Policy Responses

Published: 27 September 2023 – Irish Examiner, Business & Economy

In a timely piece for the Irish Examiner’s Business & Economy section, the editors turned a critical eye on Ireland’s economic trajectory as it faces a mix of growth prospects and inflationary headwinds. Drawing on data from national statistics, the European Central Bank (ECB), and the International Monetary Fund (IMF), the article paints a nuanced picture of a nation that has been one of the EU’s fastest‑growing economies in the post‑pandemic era, yet one that now confronts a raft of new challenges.

1. GDP Growth: A Decelerating Pace but Still Positive

The cornerstone of the article is the latest GDP growth figure for the first half of 2023. According to Eurostat, Ireland’s gross domestic product rose by 2.3 % in the first quarter and 2.5 % in the second quarter, a significant slowdown from the 4.1 % surge seen in the same period last year. While the growth remains positive, analysts cited in the piece—such as Dr. Aoife Ní Gabhann of Trinity College Dublin—stress that the slowdown reflects global supply‑chain bottlenecks, higher energy costs, and a gradual shift away from the “pandemic‑era boom” that benefited the tech‑heavy service sector.

The article also notes that the Irish Central Bank’s Monetary Policy Committee projected a 1.8 % growth rate for the full year, down from the 2.2 % forecast made in March. The Bank’s latest forecast hinges on a combination of easing global risk appetite and a stabilizing domestic investment climate, but it also acknowledges that the rise in energy prices—particularly natural gas and electricity—could further dampen private sector spending.

2. Inflation: Reaching New Heights

A key theme of the piece is the sharp rise in consumer prices. The Central Statistics Office (CSO) reported an inflation rate of 9.7 % in August, the highest in the EU since 1998. The Examiner article links to the CSO’s official inflation bulletin, explaining how food, housing, and energy account for the bulk of the rise. Notably, the price of electricity in the domestic sector jumped by 12.5 % year‑on‑year, while fuel prices surged over 20 %. These increases have placed pressure on household budgets, prompting a debate over whether the Irish government’s “fuel‑price support scheme” is sufficient.

The article quotes a statement from the Department of Finance that it is reviewing the scheme’s cap, which currently allows households to claim up to €200 in fuel‑price relief. Economists warn that even with such support, the net disposable income of the average Irish household has contracted in real terms, a trend that could have downstream effects on consumer confidence and retail spending.

3. Employment & Wages: The Dual Challenge

While the unemployment rate remains stubbornly low—down to 3.9 % in the first quarter of 2023—the article highlights a growing mismatch between job vacancies and the skill sets of the labor market. The CSO’s quarterly labor market report shows that the unemployment rate for people aged 15‑24 has risen to 7.6 %, underscoring a “skills gap” that is a recurrent theme in the Examiner’s analysis of the Irish economy.

The Examiner also delves into wage dynamics, citing a 2023 pay‑report from the Industrial Workers of the World that shows average hourly wages in the tech and finance sectors increasing by 6 % over the year. However, the article points out that these gains are not evenly distributed; workers in the hospitality and retail sectors, which constitute a large portion of the workforce, have seen wage growth of only 3 %. The piece links to a recent study by O’Donoghue & Associates on the “wage‑price spiral” and warns that if wage growth outpaces productivity, the country could see a new wave of inflationary pressures.

4. Housing Market & Real Estate: A Booming Yet Tight Sector

Ireland’s housing market continues to attract both domestic and foreign investment, but the Examiner article cautions that the rapid price appreciation may soon hit a ceiling. The Irish Housing Authority reported a 5.2 % year‑on‑year increase in average residential prices in the first quarter. The article links to a news release from the Irish Land Registry that confirms the upward trajectory of property values, particularly in Dublin and the west of Ireland.

Yet the report also flags a worrying trend: the mortgage‑to‑income ratio has climbed to 4.5 %, a level that the Department of Finance deems “unfavourable” and could restrict access for first‑time buyers. The article cites a statement from the Minister for Housing, who said the government will explore a temporary reduction in the “stamp duty” on residential purchases to help alleviate the affordability crisis.

5. Fiscal Policy & EU Budget: Balancing Growth and Sustainability

The article provides a brief overview of Ireland’s fiscal stance, noting that the government’s budget deficit is projected to fall to 2.6 % of GDP for 2024, down from 3.3 % in 2023. This comes as the Department of Finance releases a revised General Appropriations Bill that includes an increase in research and development (R&D) incentives and a new tax credit for small businesses.

Ireland’s membership of the European Union also brings into play the EU’s NextGenerationEU recovery fund, of which the country has received a share of €11 billion earmarked for infrastructure and green technology. The Examiner article links to the European Commission’s page on NextGenerationEU and quotes a spokesperson saying that the allocation “will be crucial for Ireland’s long‑term competitiveness.”

6. The Road Ahead: Policy Recommendations

Finally, the article concludes with a forward‑looking section that proposes a series of policy actions aimed at stabilising the economy:

1. Energy Strategy: Accelerate investment in renewable energy sources and secure long‑term natural gas contracts to shield households from price shocks.
2. Labour Market Reforms: Expand apprenticeship schemes and up‑skilling programmes in the manufacturing and tech sectors to close the skills gap.
3. Inflation‑Targeting: Tighten monetary policy in coordination with the ECB, while preserving growth‑favourable measures such as the “digital transformation fund.”
4. Housing Policy: Introduce a temporary “affordability tax” on high‑priced residential properties and increase the supply of social housing.

These recommendations are backed by data from the Irish Economic Review and the IMF’s 2024 Outlook, which collectively underscore that while Ireland’s economy remains resilient, it needs a strategic mix of fiscal prudence, social investment, and market‑friendly reforms to navigate the new economic landscape.

The article in the Irish Examiner’s Business & Economy section is an in‑depth, data‑driven assessment of Ireland’s economic health. By weaving together statistics from CSO, Eurostat, and the Central Bank, alongside expert commentary and links to primary sources, it offers readers a comprehensive snapshot of where the economy stands today and what steps might be necessary to secure a stable, inclusive future.