Preliminary data show Ireland's economy fell in Q4 2025 after an export-led surge, while forecasters expect a slower, steadier 2026.
• Quarterly GDP fell 0.6% q/q in Q4 2025 after an earlier decline. • Headline 2025 growth was driven by large multinational pharma exports. • Bank of Ireland forecasts growth to slow to about 2.8% in 2026.
Government/officials emphasize resilience in the domestic economy and point to strong consumer spending and investment as evidence of underlying health. Market analysts and media note the volatility of headline GDP driven by a few large multinationals (notably pharmaceutical exports) and caution that headline figures can overstate underlying demand. Bank of Ireland and some forecasters present a mixed view: anticipating a slowdown in headline growth for 2026 while also suggesting that new pharma capacity and weight‑loss drug demand could lift medium‑term potential, creating both upside and concentration risk.
Preliminary output data show Ireland’s gross domestic product fell by 0.6% quarter-on-quarter in the three months to December 2025, marking a second consecutive quarterly contraction after a 0.3% decline in the prior quarter; on an annual basis GDP expanded by 3.7%, a sharp slowdown from the prior quarter’s 10.8% pace, with the contraction largely attributed to weakness in the multinational-dominated industrial/export sector. [1][2] This Q4 weakness sits alongside evidence that the domestic economy performed more strongly earlier in the year: modified domestic demand and domestic activity rose through the first nine months of 2025 (the domestic economy grew 4.1% year-on-year in the first nine months), while GDP headline figures for 2025 were boosted by a very large multinational export surge, especially in pharmaceuticals. Policymakers and analysts are therefore emphasising the difference between volatile headline GDP (influenced by multinational exports) and measures of underlying domestic demand. [3][1] Outlook commentary from Bank of Ireland and news coverage highlights that much of 2025’s exceptional headline growth reflected front‑loaded shipments and new pharma capacity, and the bank expects growth to cool sharply — upgrading its estimate for 2025 but forecasting a slowdown to about 2.8% in 2026 — while warning that a rapid unwinding of export activity could produce a much weaker outcome. At the same time, some forecasters point to a potential "permanent upshift" in output if new pharmaceutical production and demand for weight‑loss drugs sustain higher export volumes, underscoring both upside potential and downside concentration risks tied to a small number of industries. [4][3]