Trade related to artificial intelligence (AI) is already having a significant effect on the Irish economy, according to business group Ibec.
In its latest economic forecast, the organisation is projecting that AI-related trade is on track to double over the next five years.
According to the outlook, investment in ICT equipment and software has risen to nearly €6 billion over the past 12 months, a 50% increase on the same period last year and a doubling from two years ago.
"It appears most of the products are being imported to Ireland for further onward export to the UK, continental Europe and elsewhere, which can be seen in significant spikes in inventory stocks in Ireland's national accounts," the report found.
When it comes to the impact of AI on jobs, Ibec said the picture is still not clear.
"We may not be at the forefront of developing new AI models, but early evidence suggests we have an opportunity to be a central node in AI-related supply chains," said Gerard Brady, Chief Economist and Head of National Policy, Ibec.
"We also have a massive opportunity to be the country with the best-prepared workforce for the generational change in work and skills currently underway," Mr Brady said.
Inflation
Ibec has revised its forecast for inflation this year from 2.4% up to 3.6% due to the ongoing pressures on energy prices linked to the US-Iran war and uncertainty over the reopening of the Strait of Hormuz.
In a worst case scenario involving escalating hostilities, the report warns that inflation could hit 5.7% for the full year.
"The collapse of the US-Iran ceasefire less than three weeks after implementation began underlines the uncertainty running through the global economy this year," Mr Brady said.
'Whiplash effect'
According to Ibec, US tariffs and front-loading of exports will have a "whiplash" effect on 2026 growth figures.
This reversal has led a marginally slower GDP growth forecast for 2026 of 0.9%.
"Despite this effect and the more challenging inflation environment, we expect strong investment and continued consumer growth to support domestic demand growth of 3.3% in 2026, rising to over 3.7% in 2027," Ibec said.
The outlook states that consumer spending is holding up, but inflation will dent its trajectory.
"While the labour market is showing signs of softening, investment remains strong," according to the forecast.
