Ireland: Trump and house price concerns cause dip in sentiment in December
Latest reading: Consumer sentiment fell to 73.9 in December, down from November’s four-month high of 74.1.
Looking at the wider context, consumer sentiment has trended up since late 2022: Inflation and interest rates have fallen, and the government recently introduced a budget containing EUR 10.5 billion of pre-election tax cuts and extra spending. That said, consumer confidence remains far below the long-run average of 84.3, and its speed of improvement has slowed in recent months, potentially pointing to consumer worries about the economy. In particular focus are tariffs under U.S. President-elect Donald Trump—Ireland’s economy is vulnerable due to its openness to international trade—as well as the hit to wealth from a potential fall in currently overvalued house prices.
Outlook: Our panelists anticipate the growth of consumer spending to remain steady in 2025 from 2024, maintaining a robust pace but slowing compared to the expansions seen in the years since the end of the Covid-19 pandemic. This will be due in part to a higher base of comparison—with outlays surging at an above-trend pace in 2021–2023—and shrinking savings pots.