OECD - OECD Economic Surveys: Ireland 2020

Growth will moderate over the next two years , in the context of capacity constraints and weaker external conditions. The unemployment rate will decline more slowly, but to historically very low levels (). Labour market tightening will stoke wage pressures, especially in those sectors where labour shortages are most acute.

Economic uncertainty will remain very high. Downside risks include an increase in barriers to trade between the United Kingdom and the European Union following the transition period, which could hobble trade activity between Ireland, the United Kingdom and the European Union, undermining domestic consumer and business confidence. Notwithstanding some decoupling in recent years, the United Kingdom remains a key trading partner for Ireland, particularly in the agriculture and food sectors. The nature of the trading arrangement eventually agreed will be an important determinant of Irish economic prospects over the next few years.

Increased protectionism, more generally, would hurt the very open economy. The impact of a negative shock could be exacerbated by high household debt and weak bank profitability, as well as still high general government debt.

The stock of non-performing loans on bank balance sheets remains high. A large share of those that remain stems from long-term owner-occupier housing arrears. These will be difficult to resolve, partly due to slow repossession proceedings, but may be sped up through granting lenders a collateral possession order at a future date.