BUDGET 2026 is set to be unveiled on Tuesday, 7 October, in Dublin against a backdrop of rising international uncertainty for the Irish economy.
The Government has outlined a €9.4 billion package as part of the Summer Economic Statement, including €7.9 billion in additional public spending and €1.5 billion in tax cuts.
However, this package was agreed upon before the recent introduction of 15% tariffs on exports to the United States.
This new rate poses a serious threat to Irish trade, particularly in the pharmaceutical sector.
US President Donald Trump has also hinted at even higher tariffs in the future, mainly due to the trade surplus between the two nations.
Despite the ongoing uncertainty, the Government is maintaining its commitment to long-term investment and fiscal stability.
Ministers Paschal Donohoe and Jack Chambers have ruled out one-off cost-of-living payments, insisting that Budget 2026 will prioritise sustainability over short-term relief.
Their approach reflects caution in a fragile global environment, with the business lobby Ibec and other economic observers urging a measured and prudent strategy.
The Summer Economic Statement stated that €5.9 billion of the increased expenditure will go to current spending, with €2 billion directed towards capital investment under the National Development Plan.
However, the Irish Fiscal Advisory Council (IFAC) has raised concerns about the realism of these projections.
It warns that spending overruns are likely in 2026, pointing to evidence that current spending this year has already exceeded budget targets by as much as €2 billion.
IFAC also projects a budget deficit of nearly €11 billion next year which is about 3.2% of GNI, excluding corporate tax windfalls.
It has criticised the government’s signalling that the budget package could be reduced if the global trade environment worsens, arguing that this runs counter to standard economic practice, which recommends increased support during periods of downturn.
Nevertheless, Ireland’s tax revenues remain strong.
Corporate tax receipts have already reached €16 billion this year, with further growth expected in 2026 due to changes in international tax rules.
Income tax and VAT revenues are also holding steady, giving the government some room to manoeuvre despite looming deficits.
All eyes will be on budget day on October 7th and the preceding weeks for any changes in the US President’s tariff rates, which have an outsized impact on the very US-reliant Irish economy.