IMF Warns Ireland "Relatively More Exposed" to AI Risks, Urges Reskilling and Housing Policies

Ireland faces a heightened exposure to artificial intelligence (AI) compared to many advanced economies, according to a warning issued by the International Monetary Fund (IMF). The organization highlights the State's vulnerability to emerging economic risks posed by AI, particularly concerning employment and financial markets.

In a preliminary report from its latest mission to Ireland, published Monday, the Washington, D.C.-based fund acknowledged that AI can lead to significant productivity gains. However, it emphasized that achieving these benefits necessitates continuous reskilling and upskilling of the labor force. This concern is underscored by recent job cuts: Meta, Facebook's parent company, is reducing its Irish workforce by 20 percent, or 350 jobs, as it seeks savings to fund AI investments. Similarly, software group Oracle has informed the Irish Government of plans to eliminate approximately 150 Irish jobs, representing about 15 percent of its workforce in the Republic, due to a cash crunch linked to AI spending.

The IMF cautioned that without policies to help workers adapt and acquire new skills, some individuals could be marginalized, thereby undermining inclusive economic growth. Against this backdrop, the Coalition government should also consider policies, such as affordable housing, to facilitate worker mobility between jobs and geographic regions for employment. Separately, the agency advised the Coalition to implement temporary budget measures to support households following the inflation shock attributed to the US-Israeli war on Iran. However, the IMF stressed that such measures should be temporary and targeted at vulnerable populations, rather than broad-based interventions like tax cuts, subsidies, or price controls.

Minister for Finance, Simon Harris, stated last week that he views «cutting people’s income tax and allowing people to keep more of their own money» as an important action when citizens face cost-of-living pressures.