Trade and economic uncertainty reaches record levels, Government trade forum hears
A presentation to the group by Minister for Finance
Paschal Donohoe
underlined an 'exceptionally uncertain' near-term outlook.
The forum, established earlier this year, comprises various members including Government and business and is aimed at facilitating engagement on new and emerging trade developments.
The
Department of Finance
is conducting assessments of the macroeconomic impact of tariffs along with the
Economic and Social Research Institute
(ESRI), focusing on the most likely landing zone.
READ MORE
Officials believe that is a level of 10 per cent
tariffs
imposed unilaterally by the US on the rest of the world with carve outs for certain sectors. However, Mr Donohoe's presentation to the trade forum struck a cautionary tone, noting that the carve outs are assumed 'at least for now'.
It said uncertainty was the key factor shaping the economic outlook, with trade policy uncertainty at an all-time high and economic policy uncertainty greater than during the Covid-19 pandemic.
A weakened dollar is a headwind for some exporters, the forum was told, while oil prices have been volatile.
Mr Donohoe outlined that the economy and employment would continue to expand, albeit at a slower pace. In the short term, modified domestic demand – a measure of demand in the real economy – would grow by 2 per cent versus 2.5 per cent in a no-tariff scenario in 2025. The following year it would grow by 1.75 per cent, a point lower than the no-tariff scenario.
Employment, meanwhile, would grow at 1.75 per cent in 2025, versus 2 per cent without tariffs, and 1 per cent in 2026 rather than a predicted 1.5 per cent without tariffs.
Overall, it is estimated that employment would be 1.5 per cent lower over the medium term – equivalent to almost 50,000 fewer jobs compared with a no-tariff baseline. Employment will still rise overall, however.
The forum was cautioned that modelling the Irish economy was less reliable than elsewhere, due to the impact of specific firm's decision on exports and GDP, and that the model does not take into account the impact on foreign direct investment as this concentrated sector is difficult to model.
The forum was warned that there was no clear precedent upon which confident projections could be made.
Government sources said its assessment was that the economy remained robust and would continue to grow, albeit at a slightly slower rate. More impact analysis will be presented on the day of Budget 2026, focusing on the potential hit to the public finances.
Tánaiste
Simon Harris
will be in Berlin on Friday for talks with his German counterpart, having recently engaged with his US counterpart Jameson Grier and EU trade ministers.
The Coalition intends to focus on bilateral engagements and trade missions such as Taoiseach
Micheál Martin
's current Japan trip.
The forum also got an update on the Government's upcoming action plan on market diversification, intended to help exporters tap new markets, due to go to Cabinet in July. A renewed focus is also expected on competitiveness.
It examined the semiconductor sector in Ireland, looking at current issues, and positioning Ireland as a global hub, which the Government says will be underpinned by a new national semiconductor strategy.
Minister for Public Expenditure
Jack Chambers
told the forum that the review of the
National Development Plan
will be finalised in July with a focus on investment in sectors such as water, energy and housing.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Independent
an hour ago
- Irish Independent
Gambling offers lure people into betting more, ESRI report finds
Published today, a new study titled 'Effects of inducements on sports gambling and decision-errors' was conducted by the Behavioural Research Unit of the ESRI. The research, funded by the Gambling Regulatory Authority of Ireland (GRAI), used a controlled experiment on a sample of 622 men aged under 40, just before the Euro 2024 football championship, to test whether offers or 'inducements' change the betting behaviour. As part of the experiment, participants were given money to place up to six realistic bets on Euro 2024 matches. Half of the group, which was selected randomly, were presented with offers of free bets and money-back guarantees on some bets, while the other half saw no offers. These offers caused participants to spend over 10pc more of their money, and decreased the number of people who chose not to bet at all by almost half. Some bets were intentionally designed as 'bad bets', offering odds well below market rates, which meant that participants were better off choosing other options or not betting at all. Those who were exposed to these offers were three times more likely to spend money on these bad bets. ESRI postdoctoral research fellow and the co-author of the study, Dr Diarmaid Ó Ceallaigh, said the findings 'imply that gambling offers aren't merely marketing tools, but pose a real risk of financial harm, particularly among vulnerable groups'. We are committed to continued research to understand the extent of gambling in Ireland 'The results support the case for stricter regulation of gambling offers in Ireland, following steps already taken in other European countries, such as banning sign-up bonuses, restricting offers to at-risk individuals, and capping their value,' Dr Ó Ceallaigh added. The study also showed those at risk of problem gambling were more affected by the inducements than those not at risk. Even though the majority of participants were regular bettors, most did not realise there were restrictions on free bets and that they would not receive their stake back if they won a free bet – both of which are standard practice in the market. The CEO of the GRAI, Anne Marie Caulfield, said the findings 'add weight to the discourse around the harms of gambling inducements'. 'We are committed to continued research to understand the extent of gambling in Ireland, the drivers of gambling harms and the impact of inducements and advertising on gambling behaviours,' she said. 'We are actively engaged with a broad range of stakeholders, including with industry, charities and with people who have lived experience of harm caused by gambling. 'The Gambling Regulation Act 2024 sets out obligations for licensees in the way in which inducements can be offered, including a ban on targeted inducements, and the findings of this study affirm these measures.'
Irish Times
an hour ago
- Irish Times
Paschal Donohoe well placed in Eurogroup job race despite Spanish challenge
Carlos Cuerpo was on manoeuvres. The Spanish economy minister walked into a meeting of euro zone finance ministers last October with a proposal under his arm. The European Union has for years been debating capital market reforms that would make it easier for finance to move across borders and encourage people to invest their savings, unlocking a huge pot of money that could be pumped into European businesses. Progress has been glacial because governments are reluctant to align national rules around subjects such as insolvency regimes and oversight. So what if a smaller group keen on the financial reforms went ahead without the rest? Cuerpo suggested this cohort could plough on and integrate aspects of their capital markets, with other EU states following later. READ MORE The idea was trailed in the media the morning of the Eurogroup, which is the monthly meeting bringing together finance ministers from the 20 euro zone countries. Minister for Finance Paschal Donohoe , who has been president of the Eurogroup since 2020, certainly took notice. It was as good an indication as any that Cuerpo was after his job. Donohoe got out early this year to signal he wanted to continue chairing the meetings for a third term. Just as the deadline for challengers was about to close last Friday, the Spanish minister put his name forward, as did Lithuania's finance minister Rimantas Sadzius. The 20 ministers will vote at the next Eurogroup meeting on Monday. A simple majority of 11 elects a winner and Donohoe is heavily tipped to hang on to the position. Cuerpo, a former senior finance official, has served as economy minister in Pedro Sánchez's left-wing government in Spain since late 2023. The Lithuanian candidate has pitched himself as someone who would represent smaller EU states, though Donohoe has largely cornered that share of the market. The vote is likely to be a contest between Ireland and Spain. It was the same story five years ago. Donohoe was up against Spain's Nadia Calvino, who had the backing of France and Germany. The Irish minister built a coalition of small and mid-sized states to clinch the influential role. Those in Donohoe's circle are confident he has more than a dozen votes heading into the election. Holding on to those commitments of support has been the focus of this week. The Dublin politician has spent months laying the groundwork for his re-election with other finance ministers. Fine Gael 's stock is at a low ebb within the European People's Party (EPP), the centre-right grouping that dominates EU politics, but Donohoe remains well regarded. Cuerpo and Sadzius come from centre-left governments and the EPP want one of their own to hold on to the Eurogroup chair. Ireland's network of Ambassadors have been put to work, making calls to their counterparts in capitals across the euro zone to talk up Donohoe. 'The time has come to move from discussion to delivery. The credibility of our collective project depends not on what we say, but on what we achieve – together, and without delay,' Cuerpo wrote in a letter to finance ministers announcing his bid. There is an implicit dig there that the Eurogroup has been too much of a talking shop during Donohoe's stewardship as chair. Though in some sense that is the remit. The group usually tees up decisions that are later taken during meetings of all 27 EU finance ministers, or by national leaders at summits. 'What the Eurogroup can do is co-ordinate the positions of the euro zone member states,' says Menelaos Markakis, an associate professor of European law at Erasmus University Rotterdam. 'During the previous financial crisis, the key terms of bailouts were agreed essentially in the form of the Eurogroup and formally adopted by other institutions ... There's no doubt the Eurogroup took the lead in that context,' he says. 'It's very obvious that he has a certain style, driving towards consensus,' Markakis says of Donohoe. The Eurogroup president is there to cajole the rest of the room in the same direction, one EU official said. There was a slight ring of former Fianna Fáil taoiseach Bertie Ahern's 2002 steady-as-she-goes election slogan in Donohoe's campaign letter to finance ministers. 'We have achieved much together in recent years, but we have a lot more to do,' he wrote. One thing working in Ireland's favour is the fact Sánchez's government in Spain doesn't have a lot of favours to call in with other European capitals at the moment. The Government will also be thankful the Eurogroup position has not been sucked into the bartering to fill several senior European Central Bank (ECB) posts coming vacant in the next two or so years. Picking a Eurogroup chair could well have become one piece of some grand deal to settle on Christine Lagarde's successor as ECB president, if the election had taken place next year. Donohoe still faces a nervous weekend before the votes are cast on Monday. When it comes to the back-room horse trading that decides who gets some EU job, you're never safe until you're actually over the line.
Irish Times
5 hours ago
- Irish Times
Consumers to face higher electricity costs amid networks investment
Homes and businesses face electricity bill increases of up to €16 a year if regulators approve State companies' plans to spend billions boosting the Republic's power networks. National electricity grid operator EirGrid and ESB Networks are seeking the Commission for Regulation of Utilities ' (CRU) approval to spend €19 billion over five years overhauling the systems that transmit electricity from power plants and distribute it to more than two million customers. The CRU proposes approving total spending of €14.1 billion up to 2030, but will allow scope for increases to €19 billion, depending on the progress each company makes with its plans. Fergal Mulligan, CRU commissioner, calculates that the average electricity bill will rise by €6 to €16 a year up to 2030 as a result, but cautions that this will depend on what the companies ultimately build and 'how suppliers chose to recover network costs'. READ MORE The increases will apply to network costs, which most customers pay as a standing charge on their bills, and not to electricity itself, whose cost will vary over the period. Network charges account for about 30 per cent of the €1,733 a year that the average customer pays for electricity. Mr Mulligan acknowledged that EirGrid's and ESB Networks' plans would increase customers' bills at a time when many families face financial pressure. 'In terms of the cost to the consumer of this investment, it will be assessed on a year-by-year basis,' he pledged. The CRU is seeking responses from the public and interested parties starting today. It proposes allowing the companies exceed their allowances only if progress shows them meeting their targets. It will monitor this closely over the five-year period. EirGrid and ESB Networks plea that the system needs investment to facilitate new power stations and the wind and solar farms needed to ensure the State hits climate targets. Their plans include the connection of the 300,000 new homes the Government hopes will be built by 2030, along with new businesses and services. The total allows €890 million for a 'storm resilience programme' meant to apply the lessons learned following January's Storm Éowyn , which left many homes without power for long periods. Regulators agree with the need for investment but caution that the companies most be accountable for spending and progress. EirGrid is responsible for the national grid, which transmits electricity from power stations around the country, while ESB Networks owns the lines that distribute electricity to each customer. The CRU will allocate €11.5 billion to the networks company while EirGrid will get €2.6 billion. The regulator is responding to submissions from both under a process called Price Review 6, which covers the 2026 to 2030 period. The companies plan more than 360 projects, including 29 major undertakings. They will involve 300km of underground cables and 1,000km overhead, lines connecting offshore wind and tying the Republic to Europe.
