DUBLIN, Ireland: Ireland's economy is facing significant challenges from an aging population, falling windfall tax revenues, and a widening fiscal deficit, according to a new government report.

Unveiled on Tuesday by Minister for Finance Paschal Donohoe, the study — Future Forty: A Fiscal and Economic Outlook to 2065 — offers a long-term look at the state of Ireland's economy and society.

The report analyzed more than 2,000 possible future scenarios for Ireland over the next 40 years, considering major global shifts as well as domestic economic trends.

Its "Central Scenario," which is considered the most likely projection based on current data, anticipates that living standards will keep rising, but at a slower pace. At the same time, Ireland's fiscal position is expected to weaken gradually over the long term.

The report attributes these pressures to demographic changes, reduced productivity growth, climate-related costs, and an expected decline in corporation tax receipts — a revenue source that has recently delivered exceptional "windfall" gains.

John McCarthy, the Department of Finance's chief economist, underlined that the "key takeaway" is the need to prioritize productivity. Productivity growth is forecast to decline until 2046, but even minor improvements could have a substantial positive impact on the economy and public finances.

Population trends will also be crucial. The report stresses that continued inward migration will be necessary to sustain labor force growth. Without migration, the size of the workforce would start shrinking as early as 2035.

While most forms of tax revenue are set to grow gradually in line with the overall economy, windfall corporation tax — which has played an outsized role in recent budgets — is projected to fall to zero sometime between 2030 and 2040.

Housing supply is also expected to remain under pressure for some time. The report suggests that it could take until the 2040s before supply improves significantly, with housing demand reaching its peak in the early 2030s.

The authors emphasized that their work should not be read as a precise prediction of the future, but rather as a planning tool that highlights possible risks and opportunities. They aim to provide a solid evidence base for policymakers focused on long-term challenges.

The assessment assumes current government policies remain in place and is similar to forward-looking studies undertaken in countries such as Canada, Finland, and Austria.

Donohoe said the report is intended to spark "a catalyst for debate" on the choices Ireland will face in the decades to come.

McCarthy added that Ireland often concentrates too heavily on short-term economic issues, and this analysis is meant to help "correct that imbalance."

Alongside the report, the Department of Finance has released an interactive tool that lets people explore how different decisions on key issues such as climate, technology, housing, and healthcare could reshape Ireland's economic and social future.