The National Treasury Management Agency published its Investor Presentation for March 2025. Key themes included: Ireland’s strong fiscal position, the presence of external risks, Ireland’s main trade flows and infrastructure deficits.
Ireland’s fiscal position
It is anticipated that the Irish government’s surplus, observed in 2024, will continue into 2025. The NTMA forecasted a general governmental surplus of 2.9 per cent of Gross National Income*, adjusted to remove distortions caused by the profits of multinational companies. Ireland’s economy is projected to grow in 2025, with the country’s growth following a stronger trajectory post-Covid compared to the Euro Area Average. Furthermore, Ireland boasts a strong labour market, with the unemployment rate remaining below 5 per cent for three years.
In 2024, Modified Investment rose by 2.2 per cent. However, there is an “underlying weakness” in the building and construction sector, indicating that while overall investment is rising, this sector is potentially limiting broader growth in investment.
External risks
The NTMA identified a number of short/medium-term risks to Ireland’s small open economy, which is strongly linked to the U.S. These include, geopolitical tensions, deglobalization and corporate taxation (CT).
Corporate tax revenue in Ireland has been growing rapidly, with CT accounting for 29 per cent of tax receipts in 2024. However, as Ireland’s tax base is over-reliant on U.S multinationals, the risk of concentration is high. The NTMA stated that if windfall gains from CT revenue and the apple tax case ruling were excluded, Ireland would have experienced a budget deficit in 2024.
Trade
According to the NTMA, Ireland’s main trade connections are goods exported to the EU and the U.S., services exported to the EU, and service imports from the U.S. of intellectual property/R&D assets. In January 2025, the U.S. was Ireland’s largest market for both goods exports and imports, representing 48.4 per cent of total exports and 19.7 per cent of total imports.
Multinationals play a leading role in Ireland’s export sector. Specifically, U.S. is the key export sector for MNCs, with pharma being the main sector. This has drawn Trump’s attention, particularly the significant investments made by American pharmaceutical companies in Ireland. This theme was raised during the Taoiseach’s Oval Office meeting with Trump, who described Ireland as having the “entire U.S. pharmaceutical industry in its grasp”.
The Trump administration is focusing on countries running goods trade surpluses. This is of particular concern to Ireland, which had a goods trade surplus with the U.S. of more than €50 billion in 2024. However, NTMA data indicates that since 2019, Ireland’s trade surplus with the U.S. has become a deficit when services trade is included.
Infrastructure
The presentation highlighted the continued need for infrastructure investment. Ireland’s physical capital stock has not kept pace with infrastructure demand and remains below average for high-income countries, according to the NTMA. Despite minor improvements in housing delivery, supply remains below the required level. The rise in net migration is driving up housing demand, leading to an increase in property prices, while other countries are experiencing a decline in prices. This comes as the Central Bank issued projections indicating that the Government will miss its housing targets for the next three years.
