Ireland Economic Outlook
GDP rebounded less than initially thought in Q2, according to a revised reading by the statistics office, which also showed that the rebound in Q2 was driven by domestic demand, with private consumption, government spending and fixed investment all strengthening. In Q3, our panelists expect GDP to expand more speedily in quarterly terms. Data suggests that financial pressures on Irish households are gradually softening: Compared to Q2, in July–August, both inflation and the unemployment rate eased. That said, actual data on private spending has been negative: Compared to Q2, retail sales declined in July and services activity rose less in July–August. In other news, in September, the government unveiled plans to simplify how it taxes foreign-sourced dividends from 2025 onward. The move should help safeguard investment in Ireland ahead.
Harmonized inflation rose to 4.9% in August from 4.6% in July. The higher reading was driven by a sharper rise in housing and utilities prices. Inflation should trend downward ahead due to a higher base of comparison, softer domestic demand.