Ireland will not go into recession, but it will continue to be affected by inflation and the energy crisis caused by the war in Ukraine.

That is according to John Fitzgerald, adjunct professor in economics at Trinity College Dublin, who warns that Ireland is "not immune" to the declining global economy.

Head of the Department of Finance John Hogan will today tell the public accounts committee that Ireland's economic situation is set to worsen for the foreseeable future.

"The effect of the Ukraine war, higher energy prices and, as a result of that, higher interest rates - all of that is going to slow down the world economy", Prof Fitzgerald told Newstalk Breakfast.

"Even with a reduction forecast for Ireland, it doesn't look as if the Irish economy will go into recession."

"It looks as if it will still grow slowly next year, but it will be much slower than it would've been without the war in Ukraine, without the energy price crisis."

Why is Ireland different?

The German economy is set to shrink slightly, with the United Kingdom in a prolonged recession.

Prof Fitzgerald explained what has given Ireland "an insulation" from a recession of its own.

"We've managed our finances better than some - certainly better than the United Kingdom", Prof Fitzgerald said. "Wouldn't be hard."

"The other thing is the multinational sector is strong."

"Everybody knows they have less to spend because of inflation."

"Alright, there are going to be some job losses, but it is strong and they made a lot of profits in the last 18 months so corporation profits tax this year, and probably into next year, will be up."

Despite this, Ireland can expect to feel the impact of the global economic circumstances.

"It is going to affect us", Prof Fitzgerald said.

"Everybody knows they have less to spend because of inflation, and that in turn will mean if people spend less then shops do less well, and so on."

Energy crisis

In Budget 2023, the government offered a rake of temporary schemes and once-off payments as part of its cost of living package.

But Prof Fitzgerald explained why it "will be less well able to do so" next year.

"I think you will see some wind down", he said.

"It is likely, with increased liquified natural gas imports, maybe not next year but in the following year, that gas prices will come down."

This, along with higher interest rates, will bring down the rate of inflation, he said.

"I think probably the government will wind back faster than the rate of inflation will probably come down."

Tech layoffs

Many big tech companies in Ireland have recently laid off hundreds or announced plans for downsizing.

Prof Fitzgerald believes that Apple could be one of the worst hit.

"Apple are not able to produce their phones in China because of COVID, so they're going to have a lot less phones to sell so profits this winter and into next year will be lower.

"That will affect tax in 2024."

Main image shows newspaper headline: ''Recession Increases''. Picture by: rumal/Alamy