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Investigates Investigates Money Diaries The Journal TV Climate Crisis Cost of Living Road Safety Newsletters Temperature Check Inside the Newsroom The Journal Investigates Daft.ie Property Allianz Home The 42 Sport TG4 Entertainment The Explainer A deep dive into one big news story Sport meets news, current affairs, society & pop culture have your say Or create a free account to join the discussion Advertisement More Stories The report says the 'slowdown in improving living standards is projected to occur as Ireland’s fiscal position steadily worsen'Alamy Future Forty New report says improvements in living standards to slow down from 2030s onwards The projections were made in ‘Future Forty’, a new long-term economic assessment of Ireland’s needs to 2065. 4.13pm, 4 Nov 2025 Share options A NEW REPORT has projected that living standards in Ireland will decelerate throughout the 2030s and 2040s, while public spending will face “sustained pressure” through to 2050 and beyond. The projections were made in ‘Future Forty’, a new long-term economic assessment of Ireland’s needs to 2065 which examines long-term impacts of global trends and other shifts on Ireland’s economy and public finances. The report is devised on a ‘no policy change’ basis which anticipates that the composition of tax revenue will remain steady over the time horizon, with one exception. The exception is that the portion of corporate tax receipts, which are currently deemed to be “windfall”, are projected to decline between 2030 and 2040, significantly reducing corporate tax receipts relative to the economy’s size. In the analysis, over 2,000 scenarios have been modelled to come up with a ‘Central Scenario’ which draws from the central projections. These possible future outcomes collectively point to continued growth in living standards, but with slowing growth over the long-term, and a steady decline of Ireland’s fiscal position. The report said this is due mainly to demographic shifts, slowing productivity, climate costs and a slowdown in corporation tax receipts. In a foreword to the report, Finance Minister Paschal Donohoe notes that Ireland today is “unrecognisable” to 40 years ago. Back then, the population was around a third lower at 3.5 million, life expectancy was around ten years below the current level at 73 years, and there was less than 10 kilometres of motorway compared to around 1,000 km today. Meanwhile, Donohoe said the ‘Future Forty’ report is a “tool and a guide” rather than a “prediction of the future”. “It helps contextualise how short-term decisions have long-term ripple effects,” he said of the report. Living standards Gross National Income (GNI) is an indicator that excludes the net profits of companies that have been sent abroad. It is designed to exclude globalisation effects from disproportionately impacting Irish economic results and is also used as a metric for living standards. GNI per-capita has increased 143% over the last 30 years in real terms, from around €20,000 (in 2020 prices) to around €52,000 now. However, the report projects that improvements in living standards will decelerate, with the annual growth in GNI per-capita slowing from around 2% now to 0.5% by the late 2040s. It will then remain around that rate until the end of the projected period in 2065. As a result, the Central Scenario projects that, while living standards are expected to improve, they will grow just 52% over the next four decades, to reach €79,000 in 2020 prices by 2065. The report noted that the “slowdown in improving living standards is projected to occur as Ireland’s fiscal position steadily worsen”. “Avoiding this will require an increase in the availability and quality of labour, further capital investment and enhanced productivity levels,” said the report. However, the report said this is “consistent with international trends”. “As advanced economies are ageing, economic growth and living standards are slowing, while upward pressure is being placed on public expenditure” said the report. Advertisement In the Central Scenario, the report says Ireland’s population could grow by around 27% to 6.77 million. This is based on the fertility rates continuing to decline, from 1.53 births per woman in 2023 to 1.3 by 2038 and remaining at this rate thereafter. It is also based on a Central Scenario that net migration will decrease from current levels to around 41,400 by 2030, and fall steadily to around 25,000 per year by 2065. However, the report notes that “migration flows can be more volatile, driven by a complex mix of internal and external economic, political and environmental factors”. The report said this “interaction between migration and fertility will shape Ireland’s population growth in the coming decades”. Under the Central Scenario, the old age dependency ratio is projected to be around 55% in 2065, up from 23% in 2022. The old age dependency ratio is the proportion of persons aged over 64, relative to the working age population (15-64 years). The report called for an improvement in the “cost-efficiency of the healthcare and aged care systems before they inflate excessively”. The report states that if the government is to meet its 300,000 housing target by 2030, the construction workforce will have to increase considerably. Given the “tight” labour market currently, workers from abroad or from other sectors of the workforce will have to be brought in. The consequences of not meeting the targets is “considerable”, states the report, finding that if the target is missed by five years, pent-up demand will remain for an additional five years. Missing this target by ten years will extend pent-up demand until 2049. Pensions and older people There’s a big issue coming down the track with Ireland’s aging population, with the government’s chief economist John McCarthy outlining that currently there are around 860,000 people in the population over the age of 65. This cohort of over 65s will grow to 2 million in the future, under the report’s projections. This means that instead of having four workers for every pensioner, there will only be two workers. However, despite this, Finance Minister Paschal Donohoe said today that the pension age is “settled”, indicating there are no proposals to raise the age. He said there are trade-offs for that, such as with recent PRSI increases for employers. Climate emergency Elsewhere, the report notes that the climate emergency will have “major implications for the Irish economy, and for Irish public finances, over the next forty years”. It adds that changes to Ireland’s climate, such as warmer temperatures and changing rainfall patterns, will generate adaptation costs for many sectors. It also notes that the anticipated increase in the frequency and severity of extreme weather events will cause “significant damage and disruption which will require a financial response from the State”. Meanwhile, the report notes action is “required now” to mitigate the “worst impacts of long-term challenges” such as “urgently addressing the housing shortfall” and “addressing the risk of a downturn in corporation tax returns”. It said the State will “need to ensure the expansion of Ireland’s housing stock is accompanied by necessary investments into energy, water, transport and community amenities”. The report also projects a 22% reduction in corporation tax receipts, in real terms, between 2025 and 2040. With reporting by Christina Finn Readers like you are keeping these stories free for everyone... 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