Ireland skews eurozone growth data in World Economy News 14/06/2026 The Irish statistical quagmire Eurozone GDP growth for the first quarter of 2026 was revised down from +0.1% to -0.2%. The revision was mainly driven by a new estimate for Irish growth, showing a contraction of 12.1%, which alone cut 0.5 percentage points from eurozone growth in the first three months of the year. Ireland hosts a large multinational sector, with foreign firms often locating their intellectual property rights there. This creates major distortions in export data. In addition, the pharmaceutical sector saw an exceptional export surge ahead of higher US tariffs, which is now gradually reversing. Even so, after four consecutive quarters of contraction, Irish GDP is likely to become less of a drag in the coming quarters. But that offers little comfort: even though eurozone growth excluding Ireland remained in positive territory, the second quarter is still likely to bring a slowdown. Stagnation ahead The composite PMI dropped to 48.5 in May, the lowest level in 18 months and below the boom-or-bust threshold of 50. Although the European Commission’s sentiment indicator edged up slightly last month, it remained well below the levels seen in the first quarter. With uncertainty still elevated and energy prices unlikely to decline any time soon, the second and third quarters are likely to see an economy that is close to stagnation. Beyond that, the likely end of the war, somewhat lower energy prices and a stronger impact from German fiscal stimulus should support a gradual improvement in growth. Given the much weaker first quarter and the ongoing crisis in the Middle East, we have revised our GDP growth forecast for 2026 down to 0.3%, and for 2027 to 1.2%. Don’t expect a 2022-23 inflation revival Headline inflation rose to 3.2% in May, while core inflation reached 2.5%. Upward pressure from energy prices is still likely to push headline inflation higher in the months ahead. And although we do