Delayed delivery of critical infrastructure may dampen future economic growth, experts warn

“Too often, the focus is on cost efficiency in large-scale projects, but the greater and more immediate risk to economic growth, social cohesion, and fiscal stability lies in our failure to complete these projects,” warned Ibec’s head of national policy and chief economist Gerard Brady.

Mr Brady made his comments in Ibec’s Economic Outlook for the year, published just over a month before the Government announces its budget package for the upcoming year.

Ibec is not alone in calling for long-term vision when it comes to budgetary measures, with others including economist Jim Power and business group Chambers Ireland also urging the Government to stay focused on broader issues including housing, skills, and transport to keep Ireland as an attractive place to do business.

“Ireland has clear potential to compete in the years ahead, driven by a skilled and growing workforce, energy resources, and significant improvements in national infrastructure,” said Mr Brady.

However, a looming election is likely to persuade the Government to include further cost-of-living measures in Budget 2025.

Meanwhile, IDA chief executive Mr Lohan recently noted domestic risks that threaten Ireland’s attractiveness for foreign direct investment, including a lack of national infrastructure capacity — primarily housing.

“The biggest risk we face is execution,” he said in regard to meeting targets including housing.

Ibec also warned that there are several global uncertainties which pose a risk to Irish growth prospects.

“These include the uncertain outlook for global trade policy, the impact of rising geopolitical uncertainty, and growing direct competition for foreign direct investment from large economies,” said Mr Brady.

Ibec forecasted Irish exports to grow by 5% this year, but “the longer-term outlook for Irish trade is, however, heavily reliant on global political developments,” said Mr Brady. 

Among these is the upcoming US presidential election.