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The first cut is the deepest
- The ongoing conflict in the Middle East and its impact on energy markets, raises significant uncertainty in the outlook for inflation and growth in 2026.
- So far, the ramp up in energy prices is less than was seen in 2022, particularly for gas prices which remain a fraction of the 2022 peak. However, Brent Crude has broken through the key $100/barrel level this week.
- The question remains how the Irish economy would fare if it does face a sustained shock like in 2022.
- However, while Ireland is exposed to energy price shocks, we have also built-up significant fiscal resilience to weather them.
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