“The more contested and fragmented world that is now taking shape represents a serious headwind for the Irish economy which has benefited so much from the rules-based, multilateral trade system.

“My department expects Modified Domestic Demand (MDD) to expand by 2½ per cent this year, a downward revision of almost ½ a percentage point from the autumn forecasts. This reflects heightened levels of uncertainty. Even in the absence of any further changes in tariffs, there is evidence that firms and households are adopting a ‘wait-and-see’ approach. In other words, they are holding off on big-ticket purchases; this is also a feature in other economies. For next year, MDD growth of 2.8 per cent is currently anticipated. These forecasts were produced at end-March on the basis that transatlantic tariffs would not be introduced and were endorsed by the Irish Fiscal Advisory Council.

“Given the elevated level of uncertainty, it is important to stress that our assessment published today is more akin to a scenario analysis; my officials will, of course, continue to monitor incoming data and developments and update numbers accordingly. Indeed, we have included an alternative scenario which assesses the potential impacts for the Irish economy under the current tariff landscape. In this alternative scenario, the level of domestic economic activity is around 1½ percentage points below the no-tariff baseline by end-2026.

“Overall, the changing international backdrop highlights the importance of doubling-down on our efforts to improve competitiveness and productivity. Government is doing its part, including by scaling-up capital spending under the National Development Plan.

“Government is also continuing to run budgetary surpluses in good times so that, if the economy takes a turn for the worse, we have the fiscal firepower to respond in a counter-cyclical manner, supporting incomes and employment. The Exchequer figures published today show that the public finances remain in a strong position in April."

“The publication of the Annual Progress Report (APR) represents an important milestone for the future economic health, strength and resilience of our country.

“The APR acknowledges the potential challenge that the international trade environment poses for our economic model. That said, Ireland has weathered several challenges in recent years. Throughout all of these, we have demonstrated our resilience and ability to adapt to changing global circumstances.

“In the current context, it is essential that we maintain a balanced and sustainable approach to expenditure policy. We must respond in a considered and planned way, which focuses on enhancing our competitiveness, supporting diversification and innovation of our enterprise sector, and investing in our national infrastructure.

“The medium-term expenditure framework, currently being developed by my department and the Department of Finance, will prioritise investment in key policies over the period to 2030. A key element of this work is the National Development Plan Review, which is being led by my department and will be published this summer.

“Positively, the April Exchequer return spending figures published today demonstrate sustained high levels of investment in the delivery of public services at this critical time for our economy and for global trade.

“Overall spending was €33.1 billion. This is in line with the amount profiled by departments to be spent at this stage in the year and is an increase of almost 10% on spending this time last year. This increased investment reflects the priorities of Budget 2025 and this government’s commitment to deliver continued improvements in our infrastructure and enhance our existing public services to build for a stronger future.

“In the coming weeks, I will bring a memo to Government that reinforces the key roles and responsibilities around value for money clearly defined and underpinned by legislation. These plans will set out a positive path to the future, for further improvement in public service delivery while ensuring that we can sustain the progress of recent years.”