Continuing US tariffs of 10% would reduce Gross Domestic Product, a measure of economic growth which includes multinationals, by 1.5 percentage points next year, according to the Department of Finance.
The growth in the domestic economy would be down 1 percentage point and employment growth would be 0.5 of a percentage point lower, according to the Department’s new projections.
The lower level of growth in the employment market is the equivalent to around 25,000 fewer jobs by the end of next year.
The Department of Finance produced two forecasts for the Irish economy today – one which models the effect of tariffs of 10% and one which assumes no import taxes.
The forecast shows that without any tariffs Ireland will grow by 4.1% in GDP terms this year and the domestic economy will expand by 2.5%.
Next year it is forecasting GDP growth of 3.4% and domestic growth of 2.8%.
At a press conference today. Minister for Finance Paschal Donohoe said “we are in a time of immense uncertainty.”
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He said it was also possible further scenarios could develop in the weeks ahead which could affect Ireland.
He added the “the higher level of uncertaintly the worse it is for global growth.”
He said latest income tax figures showing growth of 4.8% in Exchequer Returns published today showed the economy continued to perform well.
On the threatened tariffs on film exports to the US, Minister Donohoe said it was a “cause for concern” for the Irish media sector.
The Department of Finance also said corporation tax would be down €2bn this year compared to last year.
The economic forecasts did not model for a tariff on pharmaceuticals which are Ireland’s biggest export to the US.
US President Donald Trump has threatened an import tax on drug products but has not yet imposed any duties.
