Ireland's 2026 Inflation Could Hit 3.75%, Tánaiste Harris Warns

Ireland's Tánaiste and Minister for Finance, Simon Harris, informed the Budgetary Oversight Committee that the latest assessment from his department projects 2026 inflation could reach 3.75%. This is higher than the 3.3% average outlined last month in the spring forecast, which presented three scenarios, with 3.75% being the adverse one. Harris noted the situation is fluid but currently aligns closer to this adverse scenario, potentially evolving based on Middle East developments.

The current 3.75% projection is nearly 2% higher than the 1.8% forecast earlier this year. Despite this, the economy is still expected to grow in all scenarios, albeit at a more moderate pace and with higher inflation. Central Statistics Office figures show consumer prices rose 3.7% in the year to April, the highest annual rate since early 2024, largely due to energy price increases, including an over 80% surge in home heating oil costs.

This inflation assessment was part of the Annual Progress Report 2026. Fine Gael TD Joe Neville raised IMF concerns about Ireland's tax base weakness versus rising expenditure. Harris welcomed the IMF visit, acknowledging economic challenges and vulnerabilities, while Minister for Public Expenditure Jack Chambers defended the Government's fiscal path. Harris emphasized the goal of structural changes over frequent cost-of-living supports.