Business group Ibec calls for deployment of €2 billion National Training Fund as AI trade nears €56 billion annually and investment in digital infrastructure accelerates.
Ireland is beginning to see measurable economic impacts from artificial intelligence (AI), with AI-related trade set to double over a five-year period and investment in digital infrastructure reaching record levels.
That’s according toto business representative group Ibec’s latest Economic Outlook.
“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”
Ibec forecasts demand growth of 3.3% in 2026, with inflation expected to average 3.5% as investment in AI-related technologies, public infrastructure projects and continued consumer spending support economic activity.
The report also highlighted growing uncertainty in global trade with the World Trade Organisation expecting trade growth to slow from 4.6% in 2025 to 1.9% in 2026.
Whiplash effect
Ibec said the front-loading of goods ahead of anticipated tariffs has created what it describes as a “whiplash” effect, particularly for Ireland’s export performance.
“We are seeing early evidence of the impact of AI on our economic figures,” said Gerard Brady, chief economist and head of National Policy at Ibec. “Total trade in AI-related goods to and from Ireland is on track to double over five years, now reaching €56 billion annually.
“Domestic 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. Recent investment decisions will support this trend further. Within business, the impacts of AI on the competitive environment, investment, trade, and the labour market are very clear, and these figures will only grow over time.
“Given that we are only at the foothills of understanding the impact of AI on our economy, the full picture has yet to emerge. 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,” Brady said.
“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. However, our participation in lifelong learning hovers around the EU average, well below where we want to be for an open, global, and sophisticated economy.”
Brady said that Ireland’s current economic success has its roots in decisions taken to ensure the nation was investing to be at the forefront of new technological shifts in the global economy.
“That took bold and purposeful policy action. We have a tangible opportunity to get ahead of other countries because we have a large training fund, in the form of the National Training Fund- paid for by employers, with a €2 billion surplus. This cannot be left idle. This fund must be deployed to support the workforce transition, prepare us for change, and set Ireland up as a frontrunner in the emerging global economy.”
The outlook also assesses the impact of international trade tensions and geopolitical uncertainty on Ireland’s economic prospects.
Brady pointed to developments in the Middle East as one of several factors influencing inflation expectations and global market stability.
“The collapse of the US-Iran ceasefire less than three weeks after implementation began underlines the uncertainty running through the global economy this year. Reopening the Strait of Hormuz was necessary to prevent physical disruptions in global energy prices from fully translating into wholesale market pricing as transit stocks and reserves ran down. A continued failure to maintain the flow of physical products from the Gulf would materially raise our inflation forecast from its current 3.5% – which is already up from 2.4% at the start of the year.
“On a positive note for Ireland, exports have remained relatively resilient despite global volatility, which has been largely driven by US-imposed tariffs. This volatility means it will be 2027 and beyond before we can fully understand the true impact of tariffs on Ireland’s exporting sectors. We expect exports, which grew by around 7.5% in 2025, to rise only marginally in 2026 as a consequence of this ‘whiplash’ effect. However, exports are projected to resume strong growth at 4% in 2027.
“The story within the domestic economy is more prosaic. Consumer spending is holding up, but inflation will dent its trajectory. While the labour market is showing signs of softening, investment remains strong. Most of the levers to support long-term economic development- such as infrastructure delivery, skills development, regulation, and supporting innovation and digitalisation- remain firmly within our control.”
