Dáil Éireann Debate, Tuesday - 26 May 2026
153. Deputy Naoise Ó Cearúil asked the Tánaiste and Minister for Finance to detail the contingency measures being considered to mitigate potential impacts on the Irish economy with regard to the risks identified in the Annual Progress Report 2026, including those related to global energy markets and geopolitical developments; and if he will make a statement on the matter. [39603/26]
View answerAs a country, Ireland faces a number of potential risks over the medium term which we have documented in the recent Annual Progress Report.
The most significant risks will undoubtedly be external in nature. Even before the conflict in the Middle East, it was clear that transformational shifts were gaining pace and that economic policymaking was increasingly intersecting with geopolitics.
As an open economy, Ireland has benefitted from free trade which has encouraged multinational activity. But the uncertainty in the global economic environment poses a serious threat to the Irish economy.
We have vulnerabilities in our tax base, particularly when it comes to corporation tax. Last year corporation tax accounted for around a third of the overall tax take. Five years ago, it accounted for a fifth of all tax revenue. This is a significant increase in a short space of time, and an exposure that must be carefully managed.
Government established the Future Ireland Fund and Infrastructure, Climate and Nature Fund to prepare for future structural challenges and to mitigate the risks associated with volatile corporation tax receipts. In total, just under €20 billion has now been transferred into the two funds. These funds ensure that we have the fiscal firepower to face future challenges from a position of strength.
Since 2022, on a general Government basis, Government has recorded consecutive surpluses. This has allowed us to respond to external shocks in a timely and effective manner and to prepare for future challenges that we know are on the horizon. The reduced debt burden, which last year stood at €210 billion, will also protect us against future unforeseen shocks.
Ultimately, in the context of a deeply uncertain global economic environment and future structural challenges, the best way to mitigate against future risks is by continuing to pursue a balanced and sustainable approach to overall budgetary policy as set out in Ireland's Medium-Term Structural and Fiscal Plan. It provides a robust framework for medium term budgetary planning, ongoing investment in public services and critical infrastructure, and preserves our capacity to respond quickly and effectively to crises as they arise.
