Daniel McLaughlin

The Irish economy is in recession on the GDP data, with the preliminary first quarter contraction of 2.0% following a 3.8% fall in the previous quarter. The prelim figure is often revised, and it can be substantial, but the export data shows the surge in early 2025 now unwinding.

The Irish Govt has revised up its GDP outlook in the Spring forecasts, now 3.1% from 1.0%, although inflation now at 3.3% from 1.9%. The debt ratio falls to 31.2% of GDP. Forecast assumed $83 oil price and in severe alternative ($150) inflation averages 4.6% and 5.3% next year.

IMF forecasts for Ireland look too optimistic. They see growth at 2.5% and inflation 3.1%. Latter may have a 4% handle and the big fall in exports reported of late means a contraction in GDP is more likely.

Not always right but Polymarket showing big swing of late on odds the Democrats win the Senate in the November mid-terms, now at 56%. Late last year odds only 24%. Democratic control of House seen as odds- on for some time but now up at 86%.

Home heating oil in Ireland rose by 68% in March, so contributing a third of the 1.6% rise in the CPI on the month. Diesel prices added another 0.4 percentage points. Annual inflation rose to 3.6% but food price inflation continued to slow, to 2.3%, the lowest in 15 months.

Preliminary figures put Ireland's General Government debt in 2025 at €210bn, or 32.9% of GDP. Of the total some €138bn was in the form of Government bonds with the Central Bank currently owning €59bn as a result of QE. The net debt figure was €138bn or 21.6% of GDP.

Note that the Brent oil future benchmark is moving to the June contract, which settles at the end of April and is lower ($107.50) than the previous May contract. The market still expects oil to fall in the months ahead, and December Brent is trading $85.

Irish consumer prices rose by 1.8% in March on the flash estimate, with half the rise due to energy prices. The annual inflation rate rose to 3.6%. Food price inflation has slowed significantly, to 2.3% , but that trend likely to falter and reverse.

@MarketBlondes yes but most CB models assume rational expectations and the economy returns to equilibrium quickly after shocks, hence initial reluctance to tighten in 2022.'Lessons learnt' to quote ECB so CBs now likely to tighten early and agressively.

These points from central bankers (Bailey below) are fair: what is the psychological response from a public scarred by the huge recent rise in cost of living? And what will that do to inflation expectations? But also: what will it do to growth? Does re-anchoring inflation expectations warrant a recession?

The ECB's baseline forecast looks redundant absent rapid fall in energy prices, as based on Oil at $81 (current $110) and Gas at €46( €62). Under adverse oil averages €119 with gas at €87, inflation is 3.5% this year instead of 2.6%. Severe case 4. % and 4.8% CPI next year.

Irish household disposable income rose by 4.6% in 2025 to €186bn, with individual consumption rising at a similar pace to €161bn. Savings therefore rose by €25bn, leaving the savings ratio at 13.6%, broadly unchanged from the previous year and still well above pre-covid rates.

The mean market price for a residential property sold in Ireland last year was €424,000 or 5.9 times the mean household disposable income of €71,700.

The wholesale price of gasoline in Europe had crept higher in the last week of February and is currently 18% higher again so absent a sharp reversal Irish petrol prices could hit €1.80 a litre next week.

'Overall, the ECB was currently in a good place from a monetary policy point of view' according to the Feb meeting account, although history now if current rise in energy prices is maintained for a period. More rapid monetary response likely than seen post energy spike in 2022.

An €86bn rise in exports and a domestic investment boom, the strongest increase in a decade, resulted in a 12.3% increased in Irish GDP in 2025. The Investment spend boosted modified domestic demand, which rose by 4.9%. danmclaughlin.ie

Wholesale gas prices, the main determinant of Irish electricity prices, have soared by around 50% on news Qatar, one of the world's main producers, has halted production following attacks. Crude oil up around 8% to $79 but price for delivery later in year still around $70.

@Eamonnmoran Yes but the Governments proposed 2% cap would imply zero real change .Good for existing tenants but not for future would be renters as supply unlikely to surge.

@drdanmclaughlin Ok but rents have increased way more than inflation so what are you talking about?

If Irish rents went up by 2% a year for a decade the cumulative rise would be 22%.If inflation averaged around the ECB target of 2% consumer prices would also be 22% higher so real rents would be unchanged.

Big annual 12% drop in January's mortgage approvals for house purchase, the fourth consecutive decline. Irish banks tightened credit standards on mortgage lending in recent month on concerns about the economic outlook. according to January's Bank Lending Survey.

Ireland dodges another tariff bullet.The 10%'Temporay Import Surcharge' announced on the White House website (now apparently raised to 15%) excludes Pharma, which dominates Irish goods exports to US.