All economic activity indices are expected to rise, according to the Economic and Social Research Institute (ESRI).
It predicts that the GDP, which is mostly impacted by the multinational enterprise (MNE) sector, would expand moderately at 2.5 percent this year and 2.3 percent in 2025, while Modified Domestic Demand (MDD) will grow by 2.3 percent this year and 2.5 percent in 2025.
According to the ESRI, there are two things driving these trends.
"We anticipate a first improvement in the economy's traded sector performance, which had experienced a decline in 2023," the research says.
"Secondly, we anticipate that over the next two years, the domestic economy will continue to show modest growth."
One of the main issues the economy has faced over the last two years is the rise in the cost of living.
Overall, the inflation rate is falling, according to the study, mostly as a result of falling energy prices.
In 2024 and 2025, consumer price inflation is predicted by the ESRI to climb by 2.3% and 2.3%, respectively, if this trend continues. This is contrasted with an inflation of 6.3% in 2023.
The employment market is currently running almost at capacity and is still doing well.
It is anticipated that the unemployment rate would average 4.3% in 2024 and 4.2% in 2025.
The ESRI stated that although the medium-term forecast for the Irish economy is favourable, it is evident that a number of concerns must be taken into account.
These include managing a small open economy with a big multinational component effectively, handling infrastructural constraints in an economy running at capacity, and the effects of geopolitical tensions on global trade flows.
"Unlike 2023, we expect all major indicators of economic activity to register positive growth in 2024 and 2025 indicating likely stable growth over the period," stated ESRI author Professor Kieran McQuinn.
The ESRI's Dr. Conor O'Toole continued, saying, "Over the past few years, consumer prices have increased very rapidly, creating notable challenges for many households."
"2024 and 2025, however, we anticipate prices to rise at a much more moderate pace."