Bank of Ireland Doubles Economic Growth Forecast Amid Booming Consumer Spending and Multinational Output

Strategic Insights -

The Bank of Ireland has significantly revised its economic growth forecast, driven by exceptional surges in multinational output and exports, strong consumer and public spending, and a rapid pace of new job creation. Amidst the uncertainty posed by President Trump's tariffs, the bank's latest forecast predicts GDP to hit 8.1%, up from the previous forecast of 3.5%. This significant upward revision is attributed to the exceptional performance of the domestic economy in the first half of 2025, with consumer spending growing at a substantially faster pace than initially thought.

Key Takeaways:

  • The Bank of Ireland has more than doubled its economic growth forecast to 8.1%, up from the previous forecast of 3.5%.
  • The revised forecast reflects an exceptional surge in multinational output and exports early in 2025, as well as strong momentum in consumer and public spending.
  • Modified domestic demand, which takes out the volatile multinational sector, is forecast to reach 2.9%, up from the previous prediction of 2.8%.
  • Employment is tipped to grow by 2.6% - up from 1.8% - driven by a 3.3% pace of job creation.
  • Consumer spending in the first six months of the year was up 8%, significantly ahead of initial expectations.
  • Public spending in the first six months of the year was also up 8%.
  • Bank of Ireland chief economist Conall MacCoille attributes the upward revision to the strong performance of the domestic economy, as well as new pharmaceutical production facilities coming online.
  • The bank's forecasts assume US tariffs on Irish exports remain at 10%, with pharmaceuticals exempt.

Statistics:

  • GDP growth forecast: 8.1% (up from 3.5%)
  • Modified domestic demand forecast: 2.9% (up from 2.8%)
  • Employment growth forecast: 2.6% (up from 1.8%)
  • Consumer spending growth rate: 8% (up from initial expectations)
  • Public spending growth rate: 8%
  • Pace of job creation: 3.3%
  • Multinational output and exports growth rate: exceptional surge in the first half of 2025

Sources:

  • Bank of Ireland press release (date unknown)
  • Quote from Conall MacCoille, Bank of Ireland chief economist (unquoted, exact date unknown)
  • CSO [Central Statistics Office] data revisions (unspecified date)