Domestic demand to grow 3.8 percent amid elevated inflation
The Central Bank of Ireland has revised its 2026 modified domestic demand growth forecast to 3.8 percent while projecting headline inflation at 3.4 percent. The third Quarterly Bulletin of 2026 attributes the expansion to consumer spending and multinational investment.
Multinational investment powers domestic demand
Modified domestic demand is projected to expand by 3.8 percent in 2026 and 3.4 percent in 2027, averaging 3.5 percent through 2028.
Real modified Gross National Income grew 4.7 percent in 2025, expanding by 35 percent or €89 billion since 2019.
Multinational enterprise investment in machinery and equipment rose by over one third in three years, bolstered by spending on AI and data-centre hardware.
Meanwhile, headline inflation is forecast to reach 3.4 percent in 2026 before moderating to 3.1 percent in 2027 and 2.0 percent in 2028.
Robert Kelly, Director of Economics and Statistics, noted: “Trade tensions remain high and firms are adjusting to a fragmented and less favourable trading environment.”
Four-year housing delays and fiscal vulnerabilities
Housing completions doubled between 2017 and 2025, but delivery times from initial planning application to completion have lengthened to four years, twice as long as a decade ago.
In the labor market, employment is forecast to increase by 1.2 percent in 2026 and 2.1 percent in 2027, with net inward migration generating roughly two-thirds of job growth.
The contribution of multinational firms to modified Gross National Income rose from 16 percent in 2013 to 26 percent in 2025, prompting the central bank to urge adherence to government expenditure ceilings.
Fragile foundations beneath top-line strength
Strong headline growth masks deep housing bottlenecks and dangerous reliance on concentrated corporate taxes.
Four-year planning durations reveal structural execution failures that imperil critical infrastructure.
Breaching fiscal spending ceilings will fuel domestic inflation and leave public finances exposed.