Deirdre O Meara 
However, despite this upward trend, households and businesses could still face price pressures, said the Irish Business and Employers Confederation in its latest economic outlook.
Ibec upgraded its forecast for both consumer spending and overall domestic demand by 0.5 percentage points, but it also predicts that inflation will decrease to under 4% by year-end, which is still relatively high compared to pre-Covid and pre-war lows of the past decade.
“The process of allocating the cost of higher price levels will accelerate as governments withdraw fiscal support, triggering further pressure for both businesses and households,” cautioned Gerard Brady, Ibec’s chief economist.
Other challenges to Ireland’s financial stability and the economic outlook include potential interest rate hikes by the European Central Bank and tight energy and labour markets. Nevertheless, employment growth in Ireland is expected to remain strong.
In the meantime, the latest quarterly All-island Business Monitor survey by InterTradeIreland revealed that 91% of businesses surveyed reported stability or growth, while 33% expected sales to increase over the next six months.
Martin Robinson, InterTradeIreland’s director of strategy, warned of the complicated economic and geopolitical backdrop but mentioned that manufacturing is showing more optimism, and the hospitality sector may experience a seasonal boost in the final quarter of the year.
In conclusion, despite the positive economic outlook, households and businesses may face persistent price pressures, with the process of allocating the cost of higher price levels likely to accelerate. Businesses remain optimistic, but the complicated economic and geopolitical backdrop is a cause for concern.
