DAVY VIEW

As we expected, there was little change to Ireland’s underlying per-capita infrastructure shortfall last year, which we estimate remained at about 27% compared to high-income European countries. However, we note some early evidence of progress. Budget 2027 forecasts Ireland’s modified investment ratio to reach the upper end of the range for peer countries by 2030. The public capital spending ratio is also set to reach about 7% of national income by 2028, which is likely to exceed peer countries. However, a risk we have often noted before is that the Irish economy grows faster than official forecasts envisage, raising the bar for investment necessary to help close the infrastructure gap.