Ireland’s long-term fiscal outlook, published in the Department of Finance’s Future Forty: A Fiscal and Economic Outlook to 2065, offers one of the most comprehensive projections of the State’s economic trajectory in decades, and a clear warning that the next ten years will be decisive for long-term stability.
The report projects that under its Central Scenario, Ireland’s modified gross national income (GNI*) will reach roughly €537 billion by 2065, but annual growth will slow significantly after the 2040s, dropping to about 0.5 per cent per capita. Fiscal pressures will intensify, driven by ageing demographics, rising healthcare demand, and the cost of climate adaptation. By 2065, voted expenditure could rise from 33 per cent to nearly 39 per cent of GNI*, while national debt could approach 150 per cent of GNI* if current trends persist.
Demographic and Structural Headwinds
Demographic change represents Ireland’s most substantial long-term fiscal risk. The population aged 65 and over is expected to double to about 24 per cent by 2055, increasing spending on pensions, long-term care, and health services. The Irish Fiscal Advisory Council (IFAC) has repeatedly cautioned that age-related spending will “dominate the fiscal outlook” unless pension and eligibility structures are reformed. Meanwhile, labour-force participation could stagnate as migration slows and the dependency ratio rises, shrinking the tax base.
At the same time, productivity growth, the foundation of Ireland’s economic resilience, is projected to decline as the economy matures and globalisation becomes more regionalised. The Future Forty report notes that small variations in productivity (for example, 0.54 per cent versus 0.59 per cent) could produce a €100 billion difference in GNI* by 2065. This aligns with findings from the OECD’s 2024 Economic Survey of Ireland, which highlighted the country’s heavy reliance on multinational investment and tax-sensitive sectors.
A Narrow Fiscal Window
The Department of Finance identifies the 2030s as a critical window for fiscal reform, during which Ireland can redirect resources toward long-term investment before demographic costs accelerate. Strong corporate tax receipts, averaging €24 billion annually since 2022, offer temporary fiscal space, but both the Central Bank of Ireland and IFAC warn that these receipts are highly concentrated: fewer than ten multinationals account for more than half of total payments.
In that context, Future Forty urges converting today’s windfalls into sustainable capital through instruments like the Future Ireland Fund and increased investment in digital, energy, and housing infrastructure. The Central Bank’s Quarterly Bulletin, Q3 2025, similarly warned that investing fiscal surpluses in productivity-enhancing assets rather than recurrent expenditure is “essential to insulate Ireland from long-run fiscal drift.”
Climate, Technology and Fiscal Resilience
The report’s “Deep Dive” sections highlight several cross-cutting risks, particularly in climate and technology. Climate transition costs could reach 1.2 per cent of GNI* annually by 2065 under the Central Scenario, increasing if action is delayed. The fiscal implications span renewable energy infrastructure, flood prevention, and agricultural transition. Meanwhile, advances in artificial intelligence and automation may boost productivity but also displace parts of the workforce, placing further strain on retraining and social-protection systems.
External analysis reinforces these concerns. The European Commission’s 2024 Ageing Report estimates that Ireland’s age-related public expenditure will increase by around five percentage points of GDP between 2022 and 2070, among the largest projected increases in the EU. The National Economic and Social Council (NESC) has also argued that climate and digital transitions must be framed as long-term investment opportunities rather than short-term costs, with coordinated public-private initiatives to ensure equitable growth.
Outlook
Across all scenarios, Future Forty delivers a consistent message: the next decade will define Ireland’s ability to manage structural pressures, maintain competitiveness, and safeguard fiscal sustainability. The Department’s conclusion is clear: choices made by the mid-2030s will determine whether Ireland remains a flexible, high-income economy or faces a return to chronic deficits and constrained investment.
