Ireland’s Strong Economic Growth Tested by Iran War Fallout

The fallout from the Iran war is testing the resilience of Ireland’s economy, one of the strongest in Europe, as the Irish central bank expects soaring energy prices to slow domestic growth.

Modified domestic demand, the preferred measure as it strips out multinational activity, is forecast to grow 2.9% in 2026, down from last quarter’s 3% forecast by the Central Bank of Ireland. In 2027, MDD is anticipated to grow 2.5%, down from 2.8% previously expected. It sees inflation rising 2.9% this year, up 0.6 percentage points on the last forecast.