Dublin: Ireland’s tax revenue is failing to keep pace with population growth, posing serious long-term risks to public services and economic stability, according to a new Department of Finance report.
The report, titled “Future Forty”, projects Ireland’s economic and fiscal outlook up to 2065, warning that without policy adjustments, the government will face major challenges in funding essential public services such as healthcare, pensions, and housing.
According to the report, an ageing population, falling tax receipts, and an expanding fiscal deficit are the three biggest threats to Ireland’s economic sustainability. If left unaddressed, the national deficit could rise to 8% of national income, reducing the country’s borrowing capacity by 150% (around €117,000 per person).
At present, Ireland has 116 workers for every 100 dependents, but this ratio is expected to drop to 98 by 2065, signalling a stagnating labour force. The report emphasises that continued inward migration will be essential to sustain labour supply and economic growth.
Nearly half of all government spending by mid-century will go toward age-related healthcare, long-term care, and pensions, the report predicts. It also highlights the growing financial burden of climate change adaptation, noting that 3–4% of national spending may need to be reserved for managing extreme weather events and their economic consequences.
The Department also warns that windfall corporate tax revenues, which have boosted Ireland’s finances in recent years, are expected to decline sharply between 2030 and 2040. After decades of strong performance — including 143% economic growth over the past 30 years — the report forecasts that national growth will slow by 53% over the next four decades.
On housing, the report predicts that demand pressures will ease over the next decade, aided by the government’s commitment to build 300,000 homes by 2030, with supply expected to reach 60,000 units per year by then. However, it notes that smaller housing units will be in greater demand due to changing demographics and household structures.
The report also flags deglobalisation and the potential relocation of multinational companies as key risks to Ireland’s open economy.
It further estimates that with ten new countries expected to join the European Union, the bloc’s population could expand by 140 million people, while Ireland’s own population is projected to reach between 5.9 million and 7.9 million by 2065, depending on immigration and fertility trends.
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