AI and Data Centre Investment Boosts Irish Economy, ESRI Warns of Job Displacement

The Economic and Social Research Institute (ESRI) forecasts a boost to the Irish economy this year, driven by multinational investment in AI-related equipment and data centres. Modified domestic demand is now projected to grow by 2.6 per cent, up from 2.1 per cent previously, largely due to increased investment in information and communication technology equipment.

Despite this, the ESRI increased its 2026 inflation expectations and lowered consumer spending forecasts, citing higher global energy prices from the Middle East situation. ESRI research assistant Dónal O’Shea noted that energy price inflation will fuel price growth in other consumer areas, including food, later in the year, as food prices typically lag fuel price increases by about nine months.

ESRI research professor Conor O’Toole explained that investment in data centre materials, such as chips and processors, will remain high due to their short shelf life and frequent replacement needs. The Central Bank of Ireland also acknowledged the positive implications of multinational AI and data centre investments for the economy.

However, ESRI director Alan Barrett highlighted research indicating that about 7 per cent of Irish jobs could be displaced by AI. He warned that income losses from job destruction might exceed income gains from job enhancements, suggesting a potentially negative overall impact of AI on Ireland.