Scope expects the general government budget to remain in surplus, running this year at around 2.6% of GNI* (a measure of the size of the Irish economy excluding distortions related to the activities of MNEs) and around 2.3% on average between 2026-30. Notably, without excess corporate tax revenues, the general government budget would be in deficit by around 1% to 2% of GNI*.
While dependence on MNEs remains a key economic vulnerability – just 10 companies pay 57% of all corporation taxes and just three account for 40% – robust corporate-tax income and economic growth underpin the favourable trajectory of government debt.
General government debt-to-GNI* is likely to decline to 63% in 2025 and to less than 50% by 2030 from 68% in 2024, with general government debt-to-GDP falling to 30% from around 40% over the period (Figure 1).
Growing Strategic Reserves to Help Ireland Meet Welfare and Infrastructure Challenges
The government’s strategic approach to windfall revenues strengthens the fiscal outlook through the two sovereign funds established in 2024. Although transfers only account for a relatively modest portion of windfall corporate tax receipts, sovereign funds provide a buffer for addressing the pressing structural challenges facing the economy.
Assuming the government transfers around 0.8% of GDP a year to the Future Ireland Fund through 2040, the Fund could grow to around EUR 100bn, allowing future governments to draw down investment returns from 2041 onwards to tackle the health and welfare costs associated with an ageing population.
The government is also accumulating resources for the modernisation of infrastructure and to address climate change with EUR 2bn of annual flows to the Infrastructure, Climate and Nature Fund from 2025-2030.
Scope’s assessment of Ireland’s favourable refinancing profile further supports the fiscal outlook, with less than 40% of outstanding Treasury debt maturing within five years and a weighted average Treasury debt maturity exceeding 10 years. The National Treasury Management Agency’s cash balance of EUR 30bn (around 5% of GDP) provides further substantial financing flexibility.
Supply-side Constraints, Public Investment Needs Are Challenges
Eliminating supply-side bottlenecks remains a significant policy challenge, with the economy operating at capacity while facing labour and skills shortages.
The government’s updated National Development Plan includes EUR 102.4bn in capital investments between 2026 and 2030, with overall investments of EUR 275.4bn by 2035, but execution risks remain elevated given the tight labour market and lengthy processes.
Addressing these supply-side constraints through labour-market reforms will be crucial for the economy to absorb the ambitious infrastructure spending on housing, water, energy and transport.
Over time, implementation of the National Development Plan could enhance the growth model and support competitiveness, while mitigating the economy’s exposures to global shocks as a small, open and financially inter-connected economy.
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Thomas Gillet is a Director in Sovereign and Public Sector ratings at Scope Ratings. Elena Klare, analyst in sovereign ratings at Scope, contributed to drafting this research.