As a small, open economy, Ireland is vulnerable to geopolitical and global economic pressures. The full economic impact of Brexit and the implementation of the new trading relationship between the EU and the UK is still being assessed. Global tax reform will likely impact some business decisions, but Ireland’s position as an exporting nation and a destination for inward investment remains strong.
Like other nations, Ireland is increasing its resources to fight cyber-attacks, and the government’s refusal to concede to a May 2021 ransomware attack on its national healthcare system has set a strong precedent to not give in to malicious behavior. Legislation to implement an investment screening regime around foreign direct investment in Ireland received parliamentary approval in late 2023 and is expected to be enacted by mid-2024 to give effect to EU Regulation 2019/452 in Ireland.
The government is eager to support business and showed this throughout the COVID-19 pandemic and more recently during periods of high fuel cost inflation, when business subsidies kept sectors alive throughout numerous lockdowns. In terms of long-term business supports, the roll out of nationwide broadband and other physical infrastructure projects can be slow. The growing data center footprint is also raising concerns over the security of energy supply in the longer term.
Project Ireland 2040 outlines the Irish government’s plan to provide for regional development and to improve the nation’s infrastructure with a focus on green and digital economies. The plan is based on the premise that one million extra people will be living in Ireland in 25 years. While there are calls from industry groups for an increase in capital spending, suppliers continue to face significant price pressures at current levels when doing business with the public sector. Strong competition from Irish and European suppliers dictates that U.S. exporters must offer a combination of innovative and high-quality products at competitive prices.