Our projections for the labour market indicate that Ireland is heading towards full employment, although some extra capacity is possible through broader participation in the labour market. While the near-term outlook is positive, Ireland faces substantial tail risks.
These include “hard Brexit” scenarios, protectionist pressures and shifts in the international tax regime that would effectively penalise small economies as a location for multinational production activity. In addition, a sudden shift towards tighter conditions in international financial markets is widely cited as a possible trigger of a contraction in international economic activity.