“I note that GDP remained elevated in the second quarter driven by significant production in the multinational sector. The elevated level of activity in the first half of the year is attributable, in part, to the front-loading of exports to the US in advance of tariffs. This is expected to moderate over the coming quarters.

"Of course, GDP is not an accurate reflection of living standards in Ireland. Indeed, my preferred metric – Modified Domestic Demand – presents a better approximation of domestic activity. On this basis, the domestic economy grew by 0.6 per cent relative to the previous quarter and is up around 3¾ per cent in the first half of the year on an annual basis. This is consistent with the strength of the labour market where the number in employment reached an all-time high of over 2.8 million in the second quarter.

"I am particularly encouraged by the increase in investment in the second quarter. Indeed, despite elevated uncertainty, modified investment recorded an annual increase of over 7 per cent on an annual basis, driven by activity in the building and construction sector.

"Figures from today’s release confirm the strength of the economy in the first half of the year. Looking forward, however, the international outlook remains very challenging. While the government welcomes the degree of certainty provided by the Framework Agreement between the EU and the US on trade published last month, the imposition of widespread tariffs will, of course, weigh on growth over the coming years.

"Given the more challenging external backdrop, it is imperative that policy remains focussed on boosting the resilience of the Irish economy. That is why Budget 2026 will be framed around investment. This will help maintain competitiveness and boost productivity which is the foundation for long-term improvements in living standards."

---

Notes