The Irish economy remains in "good health" with over 440,000 jobs added since just before the Covid-19 pandemic, according to the Department of Finance's Summer Economic Statement 2025.
The department released the statement today, and said that the Irish economy has absorbed an "increasing array of complex shocks" over the last decade, all of which have been "external in origin".
In the statement, the government acknowledged that long standing economic and trading relationships are being tested, most notably through the imposition of tariffs on goods flowing to the US from EU member states.
It found that a "sea change" in the EU - US bilateral economic relationship is underway, and that "higher barriers" to trade are likely to prove challenging for the Irish economy.
The government highlighted that a scaling up of US tariffs would, "clearly", have larger effects on the economy, especially if it triggered tit-for-tat escalation.
A widening of the scope of tariffs, to include sectors that generate significant employment as well as tax revenue, would be especially problematic for Ireland.
According to the Summer Economic Statement, elevated levels of uncertainty are likely to trigger higher precautionary savings by Irish households.
The government has outlined that while the headline budgetary position is in surplus, this is "almost entirely" due to a handful of large corporate tax payers.
In the statement, the government said that over the medium term structural changes- such as an aging population, the phasing out of fossil fuels and other greenhouse gas emitters, the need to facilitate the digital transition, and the fragmentation of economic activity along geopolitical lines- will have profound implications for the Irish economy.
The government said that Budget 2026 includes an overall package of €9.4 billion, that will be comprised of both tax reductions and public spending increases.
The tax package will amount to €1.5 billion, while the spending package will be €7.9 billion.
The government said that if there is a "deterioration" in the tariff landscape, government will recalibrate its fiscal strategy.