While our central projections envisage continued improvements in the public finances over the coming years, the outlook is uncertain with significant risks around key determinants of the fiscal position. These include the pace of economic growth, inflation, the likely path of interest rates and the level of corporation tax revenue into the future.
As well as short-term pressures, the public finances face challenges from several known medium-term changes that will affect the Irish economy and labour market over the coming years. One such challenge is population ageing. Although Ireland’s demographics are currently relatively favourable, changes in the demographic structure of the population will occur over the coming decades.